How to do a self-assessment tax return

How to do a self-assessment tax return

Firstly, you need to have already registered for self-assessment through HMRC. Once you’ve done this, you’ll receive a Unique Taxpayer Reference (UTR), which you will need for any matters involving HMRC and your business.

Your tax return can either be completed by yourself, or by an accountant on your behalf.

Many people choose to hire an accountant to not only ensure they complete their tax return correctly but to take advantage of the fact they can:

• take care of certain tasks, such as filling in and filing forms, leaving you to concentrate on running your business
• ensure that you remain compliant with your financial liabilities and keep on top of important deadlines
• provide useful financial advice that you might not have been aware of, which could potentially save you money in the long run

Our Is it Easy to Switch Accountants? page will give you guidance on both changing and finding the best accountant.

You’ll complete your tax return by using information such as:

• Income from your main employment.
• Any other employment income (if, for example, you were in a full-time job before becoming self-employed).
• Any income from property if you’re a landlord.
• Income from dividends.
• Expenses.
• Any gifts to charity.

HMRC will then calculate how much tax you owe.

The deadline date for completing your tax return and paying any tax owed is the 31st of January.

How do I know if I need to file a self-assessment tax return?

There may be certain situations where you need to complete a tax return, but it’s perhaps not obvious that you have to do so.

For example, you will need to file a tax return if you:

• are newly self-employed and have earned more than £1,000
• are self-employed and earn less than £1,000 but wish to pay Class 2 NICs voluntarily to protect your entitlement to State Pension and certain benefits,
• earn income from property that you own and rent out
• are claiming Child Benefit and you or your partner have an income above £50,000
• receive interest from banks and building societies (more than £10,000),
• receive dividends in excess of £10,000
• need to pay Capital Gains Tax

Filing your tax return early

There are a number of reasons why it’s worth filing as early as possible:

• You’re able to plan ahead. Finding out how much you owe in tax as soon as you can allows for more accurate planning, plus, it takes away the stress of finding out last minute should you not have the funds.
• It’s easier to organise spreading costs if you need to. If you are unable to pay in one go, then you could look at spreading the cost of your tax bill with weekly or monthly payments using HMRC’s Budget Payment Plan.
• Quicker access to a refund. If you are due a refund then you’ll receive it sooner – this information will be available in the HMRC app once you’ve filed.
• Easier and less stressful to get help if you need it. If you need help filing your return you can access a range of online guidance and information sooner rather than later, plus, you can look at getting help if you are unable to pay your bill in full by the 31st of January deadline. You may be able to set up a Time to Pay plan for example.

If you’re late filing your tax return then this will result in a £100 fine, which will increase after three months; there will also be further penalties and interest if payment is late.

Sign up with us today if you need some help with your tax return. If you need any further information, please give us a call on 01442 795 100, email sophie.lewis@dolanaccountancy.com. or contact us via live chat.