How to pay tax online

A guide to submitting all your tax returns and payments via the web

Paying VAT and taxes are now a part of most small businesses. In the past completing a tax return would be a long winded paper exercise.

Now government departments are encouraging all of us to make payments and submissions using the internet. , and from April 1 2011, all companies and organisations will have to file their company tax return online for any accounting period ending after March 31 2010. Also, from the same date, companies and organisations will have to pay any corporation tax and related payments due electronically (for example by Direct Debit).

By submitting documents online a business can save money and operate more efficiently. Once you have the computers and connections in place there is no additional cost to online submissions compared to paper submissions.

What are online submissions?

Online submissions are quite simply the completion of forms across the internet instead of completing them manually and posting them off. By encouraging online submission government departments can reduce the paper workload on their staff and hopefully reduce costs. Data that you complete online in a form gets put into a central database and then processed, rather than being hand copied or scanned into systems.

For example, the following can be submitted to HM Revenue and Customs online:

  • Self Assessment forms
  • PAYE forms and returns
  • Corporation tax

Local authorities may also enable you to pay bills such as business rates online. Check with your local authority directly to see if they support such payments. Other government bodies that issue grants will often expect an online application. This follows the basic model as used to pay taxes or VAT. Check with the grant provider to see what support they can give you for online submissions.

Some utility providers such as gas, electricity and water may allow you to pay bills online and save a small percentage of the bill in the process.

Why should I bother with on line submissions?

By now you have probably set up your computers and internet access and are being quite successful in your use of computers in your small business. Submitting these documents online are another way of making your computer systems pay, and in some cases you will receive payment for doing these forms online. For example if you had fewer than 50 employees in November 2004 and sent your 2005-06 Employer’s Annual Return online, you would have received a £250 deduction from your PAYE (i.e. tax) bill.

Additionally if you have an accountant or other third party working for you (called an agent in government speak) they can submit the filling for you online and claim the money on your behalf.

Where should I go from here?

The government have some web sites to help you with online payments and the Local Government Association has links to local authority web sites:

Review these websites and see where you can save money by submitting information online.

Are these sites safe to use?

These sites are generally safe to use and have very good security in place. Unfortunately users are subject to attempts to get their business details by fraudsters and no web site can be guaranteed to be 100% safe 100% of the time.

This web site explains any current threats to government sites used for online submissions:

Government Spoofs

Source: Online tax payment

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