Form 110/111: what’s changing with income tax withholding and how to avoid mistakes in 2026

Every quarter, self-employed professionals with staff and businesses that withhold income tax from employees or contractors face the same date with the tax authority: Form 110. While it isn’t new in itself, the tax agency keeps refining its cross-checks between what’s reported quarterly, what shows up in the annual summary (Form 190), and what third parties report through other channels, such as invoices with withholding recorded in VAT ledgers. In practice, this means mismatches between quarters are increasingly visible to the tax authority, and a single slip-up can end up triggering a formal request for information or a parallel assessment.

Who is required to file Form 110

Form 110 covers withholdings and payments on account applied to certain types of income when the payer isn’t required to use Form 111, which is the one that generally applies to most small businesses and self-employed professionals for payroll and contractor invoice withholdings. Confusion between the two forms is still common: many people say “Form 110” when they actually mean Form 111. Before filing, it’s worth confirming with the tax authority’s online portal or your accountant exactly which form applies to your business and how you pay, because filing the wrong form — or filing late — triggers surcharges and, in more serious cases, penalties calculated on the amount that wasn’t paid on time.

What this means for your business

For a self-employed person with staff or who subcontracts other professionals, this translates into several practical steps. First, check that the withholdings applied on contractor invoices and payroll match exactly what’s later paid in the quarterly filing: a discrepancy that carries over several quarters can turn into a real headache when the annual summary is due. Second, move the accounting review up to the days before the deadline rather than leaving it to the last minute, so there’s room to fix issues before filing instead of having to correct them afterward with an amended or replacement return, which tends to draw more attention from the tax authority. Third, if your business is growing and you’re about to hire your first employee or start invoicing professionals subject to withholding, that’s the moment to properly register the related tax obligations: skipping that registration doesn’t exempt you from withholding and paying, and it can lead to a late-filing penalty once the tax authority catches up with it.

How to minimize the risk of errors and penalties

The best defense against these information cross-checks is consistency: keep a running record of withholdings updated quarter by quarter, reconcile it against your accounts and payroll before each quarterly filing, and keep the calculation detail on file along with the filing receipt, not just the final PDF. It’s also worth watching deadlines with some buffer, since surcharges for late filing without a prior request from the tax authority are proportionally lower than those applied once the tax authority steps in first — so catching your own mistake and fixing it early is usually far cheaper than waiting for them to find it for you.

At Zythos Business, we handle accounting and tax compliance for self-employed professionals and small businesses with that same discipline: we reconcile every quarterly filing against the books before submitting it, give advance notice of deadlines, and check that withholdings match up across forms so no client is caught off guard at the annual summary. If you’re unsure whether Form 110 or Form 111 applies to you, or whether your withholdings are calculated correctly, now’s a good time to review it with your accountant before the next deadline.