An introduction of more deadlines mean that from next April, Millions will be required to file as many as nine VAT and tax returns per year in addition to meeting six payment deadlines.
The Government has said that the cost to individuals will not be substantial and that the process will increase orderly record keeping. The extra filing requirements were introduced with the intention to lower the large percentage of self-employed filers and small businesses that make errors on their tax returns, which leads to billions of pounds in tax to go uncollected.
As an expert in tax, we have identified that it could actually cut tax revenues by encouraging increased claiming on expenses.
How reporting will work
If we use a case study of a business that has a year-end on 5th April. The business will enter into the new system from the beginning of the tax year 2018-19. Listed below are the tax events for the first year in the new system (not including 4 VAT tax dates).
July 5 2018: your first quarter (2018-19) ends
July 31 2018: your second payment for the 2017-18 tax year is due
August 5 2018: your first quarterly return (2018-19) is due
October 5 2018: your second quarter (2018-19) ends
November 5 2018: your second quarterly return (2018-19) is due
January 5 2019: your third quarter (2018-19) ends
January 31 2019: your return and outstanding payments for the 2017-18 tax year are due
January 31 2019: your first payment for the 2018-19 year is due
February 5 2019: your third quarterly return (2018-19) is due
April 5 2019: your fourth quarter (2018-19) ends
April 6 2019: the 2019-20 tax year begins, setting off the next four returns for that year
May 5 2019: your fourth quarterly return (2018-19) is due
July 31 2019: your second payment for the 2018-19 tax year is due
January 31 2020: the fifth, “finalising” return for 2018-19 is due, along with final payment.