Business News
April sees the introduction of new ways to file and pay taxes
The end of the financial year will see the introduction of a number of changes to the way that businesses must file and pay certain taxes.
The new way to file these taxes will be online only and payment must be made electronically. HM Revenue and Customs (HMRC) is keen to encourage businesses to file online tax return; therefore, the switch to these new online systems comes as a result of a HMRC review.
PAYE returns
Most employers are now required to file their annual employer return online; however employers with less than 50 staff must file their end of year’s forms online by April at the latest. From the 6th of April 2011, the new requirements will apply to everyone.
Meanwhile, penalties for late payment will apply from the 6th of April this year, 2010, and will affect payments due to be made from May onwards. The level of the new penalties is as follows:
| No of Times late in a Tax Year | Penalty Percentage | Amount to which Penalty Percentages Apply |
| 1 | No Penalty | Total amount that is late in the tax year (ignoring the first late payment in that year) |
| 2-4 | 1% | As above |
| 5-7 | 2% | As above |
| 8-10 | 3% | As above |
| 11 or more | 4% | As above |
Exceptions
There will be a few exceptions to the new system; in particular late payment penalties will not apply to employers who have ‘time to pay’ arrangements with the HMRC or where the employer has ‘reasonable excuse’ for not paying on time. As a result of these changes, it will be important for all employers to review their procedures and ensure they do not fall foul of the new payment deadlines.
VAT returns
From the 1st April 2010, HMRC will begin the process of doing away with paper VAT returns, swapping over to a fully online system. Business with a turnover of more than £100,000 will need to file returns and make payments online.
Businesses with an effective VAT registration date on or after 1 April 2010 will need to have returns filed and paid made online, regardless of their turnover. The remaining VAT registered businesses may continue to file paper returns for the time being, but the situation is set to be reviewed by 2012.
Penalties for failing to make an electronic return will be applied to periods ending on or after 31 March 2011.
Corporation tax returns
Also on the horizon are changes to corporation tax returns.
For returns due after the 31st March 2011, corporation tax returns must be filed online with accompanying accounts and computations in Extensible Business Reporting Language (XBRL is the new standard designed for business financial reporting).
Payments must also be made electronically. Companies House will also accept company accounts in the same format, which will apply to all company tax returns being submitted to HMRC from April 2011.
