Advanced Taxation (UK) · Statutory obligations, time limits and the implications of non-compliance

Tax Compliance Obligations and Record Keeping for ATX-UK

Updated 11 October 2026 · Fact-checked

Tax compliance means telling HMRC you are chargeable, filing returns on time, keeping records for the required period and paying tax by the due date. In ATX-UK you identify the taxpayer, apply the right deadline, then state the consequence of missing it, such as interest or a penalty.

Understand Tax Compliance Obligations and Record Keeping

Every UK tax system rests on four duties. You must notify HMRC that you are chargeable. You must file a return. You must keep records that support the return. And you must pay the tax on time. Each duty has its own deadline, and each deadline is tied to a date such as the end of a tax year or an accounting period.

For an individual, the tax year runs from 6 April to 5 April. If you have taxable income or gains and have not been sent a return, you must tell HMRC by 5 October following the end of that tax year. The return is due by 31 October if filed on paper and 31 January if filed online. Tax is normally due by 31 January after the tax year, with payments on account due on 31 January in the tax year and 31 July after it.

For a company, the clock runs from the accounting period. A company must tell HMRC when it comes within the charge to corporation tax, which is within three months of starting activity. The return is due 12 months after the end of the accounting period. Tax is due nine months and one day after the period ends. Large companies pay in quarterly instalments. The profit threshold given in the ACCA tax tables is £1,500,000.

For VAT, a business must register when taxable turnover goes over the registration limit, which is £90,000 in the tax tables. Late VAT payments carry a penalty that depends on how many days late the payment is.

Records matter because a return is only as good as the evidence behind it. Individuals with business or rental income must generally keep records for five years after the 31 January filing deadline. Other individuals keep them for one year after that date. Companies keep records for six years from the end of the accounting period. Missing any of these duties exposes the taxpayer to interest, penalties and a longer period during which HMRC can enquire.

Key rules to remember

Notification of chargeability (individual): Deadline = 5 October after the end of the tax year of chargeability; Applies if you are chargeable and have not received a notice to file a return.
Individual return deadlines: Paper: 31 October after the tax year. Online: 31 January after the tax year; Online filing gives three extra months, so it is the usual exam answer.
Individual payment dates: Payments on account: 31 January in the tax year and 31 July after it. Balancing payment: 31 January after the tax year; Underpaid tax carries interest at the rate in the tax tables, 8.50%.
Company return: Filing deadline = 12 months after the end of the accounting period; Notify HMRC within three months of the start of first chargeable activity.
Company payment: Due date = 9 months and 1 day after the end of the accounting period; Large companies pay quarterly instalments. The tax tables give a profit threshold of £1,500,000.
Record keeping: Individual in business or letting: 5 years after 31 January filing deadline. Other individuals: 1 year after it. Company: 6 years from the end of the accounting period; State the period and the starting point.
VAT registration and late payment: Register when taxable turnover exceeds £90,000 (deregister limit £88,000). Late payment: up to 15 days none; 16 to 30 days 3%; over 30 days 6% plus a daily penalty at an annual rate of 10%; These figures come from the tax tables supplied in the exam.
Interest on tax: Interest = tax × rate × months late ÷ 12; Underpaid tax 8.50%, overpaid tax 3.50%. Work to the nearest month and nearest £.

How to solve Tax Compliance Obligations and Record Keeping questions

Use the same sequence for any compliance question. It stops you missing a duty and keeps the answer in the order the marker expects.

1Identify the taxpayer: individual, company, partnership or VAT-registered business. Each has different rules.
2Identify the duty being tested: notification, filing, payment or record keeping. Some questions test all four.
3Fix the key date: tax year end (5 April), accounting period end, or the date turnover went over the limit.
4Apply the rule to that date and write the exact deadline as a calendar date, not just a rule.
5State the record keeping period and when it starts.
6State the consequence of non-compliance: interest, a late payment penalty or a filing penalty, and quantify it where the tax tables give a rate.
7Check the supplementary instructions: nearest £, months to the nearest month, and assume 2025/26 rates continue.
8Finish with a short recommendation, such as what the client should do now and by when.

Quickest way: Date-first timeline method

When to use it: Use it when the question gives several dates and asks what the client must do and when.

Draw a quick timeline from the trigger date (start of trading, end of period, limit exceeded).
Mark each deadline on it: notify, file, pay, keep records until.
Write each deadline as a real date next to the rule.
Compute any interest or percentage penalty in one line using the tax table rate.
Add one sentence on action and risk for the professional skills marks.

Common mistakes in Tax Compliance Obligations and Record Keeping

Mixing up the 5 October notification date with the 31 January filing date.
Both relate to the same tax year and students memorise only the filing date.
Fix: Link 5 October to telling HMRC you are chargeable. Link 31 January to the online return and payment.
Giving the company payment date as 12 months after the period end.
The filing deadline is 12 months, so students apply it to payment too.
Fix: Remember filing is 12 months. Payment is 9 months and 1 day for companies that are not large.
Stating one record keeping period for everyone.
Students recall 'five years' or 'six years' without the taxpayer type.
Fix: Say who it applies to and the starting point. Individuals in business: five years after the 31 January filing deadline. Companies: six years from the end of the accounting period.
Treating all late VAT payments as penalised.
Students skip the tax table.
Fix: Read the table. Up to 15 days late carries no penalty. 16 to 30 days is 3%. Over 30 days is 6% plus a daily penalty at an annual rate of 10%.
Using the wrong interest rate or ignoring the months late.
Several rates appear in the tax tables.
Fix: Underpaid tax is 8.50% and overpaid tax is 3.50%. Multiply by months late divided by 12, to the nearest month.
Listing rules without applying them to the scenario.
Students recall notes instead of reading the facts.
Fix: Use the client's actual dates and name the exact deadline. End with advice for professional skills marks.

Worked examples

Example 1

Anil started self-employment on 1 July 2025. He has not been sent a tax return. He will file online. State the date by which he must notify HMRC, his filing and payment date for 2025/26, and how long he must keep his records.

Show the solution

Trade started on 1 July 2025, so the first tax year is 2025/26, which ends on 5 April 2026.
Notification: by 5 October following the end of the tax year, which is 5 October 2026.
Online filing deadline: 31 January following the tax year, which is 31 January 2027.
Payment: the tax for 2025/26 is due by 31 January 2027. If payments on account arise in later years, they fall on 31 January and 31 July.
Records: as he is in business, he keeps them for five years after the 31 January filing deadline, so until 31 January 2032.

Answer: Notify by 5 October 2026. File online and pay by 31 January 2027. Keep records until 31 January 2032.

Example 2

Bryn Ltd has an accounting period ended 31 March 2026. Its taxable total profits are £1,200,000 and it has no associated companies. Corporation tax is £40,000 lower than expected: it pays £40,000 of the liability three months late. State the return deadline, the payment due date, whether quarterly instalments apply, the interest on the late payment and the record keeping deadline.

Show the solution

Return: 12 months after the period end, so 31 March 2027.
Payment: nine months and one day after 31 March 2026, which is 1 January 2027.
Instalments: the profit threshold is £1,500,000. Profits of £1,200,000 are below it, so Bryn Ltd is not large and pays in one amount.
Interest on underpaid tax is at 8.50%: £40,000 × 8.50% × 3 ÷ 12 = £850.
Records: six years from the end of the accounting period, so until 31 March 2032.

Answer: Return due 31 March 2027. Tax due 1 January 2027, no quarterly instalments. Interest on the late £40,000 is £850. Keep records until 31 March 2032.

Exam tips

Write exact calendar dates for the client, not only the rule. Markers reward application to the scenario.
Use the tax tables for VAT penalties, interest rates and the instalment threshold. Do not rely on memory for these figures.
If the question asks for advice, state the action the client should take and the risk of delay. This earns professional skills marks.
Show interest workings in one line with the rate, tax and months. Round to the nearest £ as the supplementary instructions require.
Check whether the taxpayer is an individual, a company or a VAT-registered business before quoting a deadline.

Practice questions from Statutory obligations, time limits and the implications of non-compliance

Tax Compliance Obligations and Record Keeping in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

ACCA Applied SkillsRecord Keeping Requirements

Tax Compliance Obligations and Record Keeping: frequently asked questions

When must I notify HMRC that I am chargeable to income tax?

If you are chargeable and have not been sent a return, you must tell HMRC by 5 October following the end of the tax year. For 2025/26 that is 5 October 2026.

What are the self assessment filing and payment deadlines in ATX-UK?

A paper return is due by 31 October after the tax year. An online return is due by 31 January. Tax is due by 31 January, with payments on account on 31 January and 31 July.

How long must companies keep records?

A company keeps its records for six years from the end of the accounting period. An individual in business keeps records for five years after the 31 January filing deadline.

Are late VAT payments always penalised?

No. According to the tax tables, a payment up to 15 days late has no penalty. Between 16 and 30 days late the penalty is 3%. More than 30 days late it is 6% plus a daily penalty at an annual rate of 10%.

What interest rate applies to underpaid tax?

The tax tables give 8.50% for underpaid tax and 3.50% for overpaid tax. Calculate interest on the months late, divided by 12.