Year-end tax deadlines: Who needs to do what & when?

Year-end tax deadlines: Who needs to do what & when?

The year may only have just started, but there are some important tax deadlines coming up in the first quarter of this year and you need to be ready.

Today, 31 January, is the all-important date for anyone submitting capital allowances expenditure to HMRC. Meanwhile, businesses with a March year-end are at risk of missing out if they don’t submit their Research & Development (R&D) and capital allowances claim before the end of their accounting period.

January: Who needs to be thinking about capital allowances?

There’s no easing into the year when it comes to capital allowances, as the major filing deadline of the year comes on 31 January for partnerships and indivduals.

That’s today!

All taxpayers have a filing deadline of 31 January and that’s also the deadline for amendments to the previous year’s return should anyone have failed to identify and maximise all capital allowances they are owed. That could be purchases, constructions or refurbishments of commercial properties. This means that, right now, the clock is ticking for individuals with remaining capital allowances to claim for the tax year ending 5 April 2021.

Expenditure in the year ending 5 April 2021 also currently qualifies for Annual Investment Allowance (AIA). This scheme helps realise the value of capital allowances more quickly, and offers 100% tax relief on qualifying expenditure up to the annual limit of £1,000,000 (this will drop to £200,000 with effect from 1 April 2023).

March year-end — Busy for businesses

If you are a business, then you’ve probably got a little longer to get your tax affairs in order, and you could well be one of the millions of companies with the commonly seen March year-end.

At this juncture, it’s not just capital allowances you will need to think about. If you’ve been innovating, then your research and development tax credit claim will be front of mind as well.

This valuable tax break for businesses investing in new products, processes or services must be claimed within two years of the end of the tax year in which the work took place.

Put simply, after the end of your accounting period, you lose the right to claim for activity that took place over three years ago. So now is the time to review what your company was doing during that time and ask an expert whether those projects qualify as R&D.

Don’t worry if projects weren’t successful. It has absolutely no impact on eligibility.

And when it comes to capital allowances, don’t forget that the government’s super deduction of an unprecedented 130% first-year allowance on qualifying plant and machinery is still in force and not due to end until March 2023.