LLP members are taxed on their individual income during a Self-Assessment. Each member is accountable for listing their Self-Assessment with HMRC, arranging and filing tax returns, as well as paying Income Tax and National Insurance on their yearly income.
It’s reasonably fast and easy to register your Self-Assessment online. You can pay Class 2 National Insurance by Direct Debit every week or alternatively, bigger payments can be paid twice each year. Both Income Tax and Class 4 NI has to be paid through Self-Assessment intermittently during the year or at the conclusion of the tax year when the equivalent tax return is filed.
Class 2 and Class 4 NI
• Class 2 National Insurance is £2.75 per week and is payable when personal annual profits pass beyond £5,885.
• Class 4 National Insurance will set you back 9% on annual profits between £7,956 and £41,865.
• Profits in excess of £41,865 are liable for an added 2% of Class 4 NI.
How to send off a Self-Assessment tax return
Your Self-Assessment tax returns have to be filed with HMRC, even for those who don’t have any tax to pay. HMRC will post you a letter to your business address in the months of April or May to jog your memory about preparing for a tax return. This is either delivered to HMRC through post or online.
Paper returns need to be filed in time by midnight on the 31st October for the newest tax year. For instance, the cut-off date for filing paper returns for 2013-14 ending 5th April 2015 was on the 31st October 2014.
Tax returns completed online should be filed by 31st January the next year, so for example, the deadline for filing online returns for the 2013-14 tax year will be 31st January 2015.
The last payment of your Class 4 NI and Income tax for the 2013-14 tax year needs to be paid by midnight 31st January 2015. However, you can set up a payment plan whereby you make regular contributions to your tax bill across the whole year.
Should your tax and accounting records be quite complicated, you can always think about hiring either a tax advisor or accountant to aid you in the completion and filing of your Self-Assessment return, as well as sort out how much tax and National Insurance you owe.
If you need any advice on your self assessment please contact The Cheap Accountant today.