What are the 3 key points that an SME needs to consider when dealing with the HMRC?

All businesses will need to address the tax and other obligations with HM Revenue & Customs (HMRC) or face incurring penalties if they fail to declare or fail to pay taxes due to HMRC.


Here are just 3 considerations that SMEs need to make when dealing with HMRC:


Ensure that key tax deadlines are met


There are a number of tax deadlines for small businesses across the financial year, and it is crucial that these are met to ensure that your business is carrying out its tax operations effectively. This will include deadlines for the payment of corporation tax (normally calculated ‘nine months and a day after the end of a company’s accounting period end date’) P46s for employees, last date for expenses and benefits annual return forms and payment of PAYE/Class 1 NICs (National Insurance Contributions). These dates can vary from year to year, and it is important to contact HMRC to get a tax deadline calendar for the upcoming year.


The Business Tax Dashboard also gives businesses an online snapshot of their tax position including payments and made and those still owed.


Understand the tax reliefs or exemptions available to SMEs


Alongside larger business, SMEs (defined by HMRC as those with less than 500 employees and either an annual turnover not in excess of €100 million or a balance sheet not in excess of €86 million) are able to apply for Research and Development (R&D) Relief for Corporation Tax, if an R & D project falls under the following definition:


“R&D project seeks to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty - and not simply an advance in its own state of knowledge or capability.”


Some SMEs may also be exempt from paying VAT if they sell or supply services or goods that are exempt from VAT such as education and training, insurance, finance and credit.


There may also be a number of variations to HMRC for SMES. As an example, HMRC has announced that up until October 5th 2013, SMEs with less than 50 employees who are experiencing difficulty in reporting each payment to employees at the time of payment (real time information reporting) can send this information by the date of their regular payroll run, and “no later” than the end of the tax month on the 5th.


Updating HMRC about changes to your business


SMEs should keep HMRC informed about any changes to their growing business, such as the transfer of business ownership or any other changes of circumstances that could potentially affect your tax status.


This can be done in a number of ways, including using your Business Tax Dashboard for changes to some of your contact details and writing directly to HMRC. HMRC has as employer helpline to support you in this process.


Getting insolvency advice could provide you with the support you need to deal with HMRC.


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.

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