A key date that business owners need to be aware of is just days away, as missing it risks being slapped with hefty interest charges on late payments.
Businesses must pay their Class 1A National Insurance (NI) contributions by July 19th if paying by post or 22nd if paying electronically through the government website.
This legal requirement is a tax on any benefits companies provide to their employees, including private health insurance and company cars, reported earlier this month via P11D and P11D(b) forms.
If no relevant benefits were offered, a ‘nil’ return must be submitted online or by notifying HMRC that no return is needed.
Missing this deadline will result in interest charges and penalties: 5% on unpaid amounts 30 days late, an additional 5% after 6 months, and another 5% after 12 months.
To help business owners meet the important deadline and avoid costly late penalties, Joe Phelan, money.co.uk business bank accounts expert, offers his tips.
Phelan said, “Stay alert: To avoid the deadline slipping your mind and passing you by, set a reminder ahead of the date to log into your PAYE account on the government website and check the amount you owe HMRC in National Insurance contributions. It’s important that you pay the right amount, so check the figure carefully and ensure that your contribution has been calculated correctly, taking into consideration all of the benefits you declared.
“Organise your finances: Once you know the amount you’re due to pay, check over your business finances, including your cash flow and reserves, and ensure you have enough funds to cover both the payment and any other upcoming expenses like payroll. It’s crucial to budget for this payment throughout the year to avoid stretching the business finances too thin this month.
“Monitor your business funds: Once you’ve made the payment, keep an eye on the amount of money in your business bank account to ensure there are enough funds to cover the payment until it has gone through properly and shows up on your transactions. Any payments that bounce due to a lack of funds could result in you missing the deadline and being hit with a fine, making the process even more costly.
“All business owners must set aside some time before the deadline to complete their return, even if that be a nil return. Your dedicated business bank account should allow you to easily monitor your company’s funds and make the payment, so you can go back to focusing on your business, knowing that it’s taken care of.”
