December 31 marks a key tax deadline for individuals who have profited more than £3,000 from the sale of business assets in the last tax year.

This tax obligation applies to sole traders and business partners who personally profit from selling business assets, rather than limited companies, which are required to pay Corporation Tax instead.

Liable assets include land or buildings, fixtures and fittings, plant and machinery, shares, and registered trademarks, and must be reported via the real-time Capital Gains Tax (CGT) service.

According to the government website, the amount of tax due depends on the size of your gain, your taxable income and the type of asset your profit is from.1

You must report any gains made in the 2024/25 tax year by December 31, 2025, and pay any tax due as part of your self-assessment by January 31, 2026.

Failure to meet this deadline may result in a fixed £100 penalty, additional late‑filing penalties, and interest on any unpaid tax.

According to FOI data, the number of penalties for failing to notify HMRC about CGT liability has doubled in the last two years, from 165 in 2022/23 to 350 in 2024/25, highlighting the importance of staying on top of this deadline.2

So, how can businesses prepare for their upcoming tax deadline and stay compliant to avoid costly penalties?

Joe Phelan, money.co.uk business bank accounts expert, offers his tips:

“The December 31 deadline can catch business owners out, not due to a lack of awareness, but because poor record-keeping makes accurate reporting difficult. You could keep a watertight record of exactly what you paid and what you sold the asset for, along with any deductible costs like improvement work or fees. If you’re relying on memory or sifting through a personal bank account to find these figures, you’re leaving yourself open to errors and potential penalties.

“The best move is to isolate these transactions. A dedicated business bank account keeps commercial activity separate from personal spending, creating a reliable audit trail. When you combine this with digital accounting tools, you’ll reduce the risk of miscalculation significantly. Finally, don’t get caught short on the payment itself; use this time to ring-fence the tax due in a separate savings pot so the January 31 payment deadline doesn’t sting.”