Key self assessment dates
Each year there are key dates that you must comply with in order to submit your self assessment tax return. These are:
- Early October – register as self employed. In 2020 the deadline was 5th October so, at the time of writing, you had already missed that!
- Midnight, 31st October – submission of paper-based self assessment.
- Midnight, 31st January – submission of your online self assessment.
- Midnight, 31st January – payment of tax owed
Who needs to complete a self assessment tax return?
You must complete a self assessment tax return if:
- You earned more than £1,000 from self employment.
- You rent out a property that earned more than £2,500. (Speak to HMRC if you earned between £1,000 and £2,500).
- You earned £2,500 or more from untaxed income – for example from commission or tips.
- Your gross (before tax) income from savings or investments was more than £10,000.
- You are liable for Capital Gains Tax on profits from selling things such as a second home, shares, works of art etc.
- You’re a company director (except if it is a non-profit organisation).
- You or your partner’s income was over £50,000 and you claim Child Benefit.
- You have income from overseas and need to pay tax.
- You live overseas but have an income in the UK.
- Your taxable income was £100,000 or more.
- You earn £50,001 or more and pay pension contributions.
- You are a trustee of a pension scheme or trust.
- Your State Pension was your sole source of income and was more than your taxable allowance.
- You received a P800 from HMRC because you did not pay enough tax last year.
To check for other criteria which may apple to you, refer to https://www.gov.uk/guidance/help-and-support-for-self-assessment
How to complete your self assessment
If this year is the first time you have completed a self assessment tax return, it may feel daunting.
Before you get started you will need:
- Your 10 digit Unique Tax Reference (UTR).
- Your National Insurance Number.
- Information about all untaxed income, self employed income, share dividends, pensions and so on.
- Records of all expenses related to self employment.
- Details of pension of charity contributions.
- P60 or other records of income you’ve already paid tax on.
Take time to complete the SA100 self assessment tax return carefully, you do not need to do it all in one go. Refer to the HMRC help sheets for assistance as you work through the return.
It may also be necessary to complete supplementary forms if you have self employed income, need to report property income or have capital gains to declare.
Self Employed expenses
It is very important to correctly calculate expenses you have incurred relating to any self employment. The guidance sheets with your self assessment tax return will help you work out what you should and shouldn’t claim for.
Although you don’t need to submit receipts with your tax return, it is important that you retain them for five years in case the HMRC asks to see them in the future.
Paying your tax bill
After your self assessment has been submitted, you will be told how much tax and National Insurance you need to pay.
You must pay what you owe by midnight on 31st January.
You can make payments via BACS, CHAPS, online banking, a company credit or debit card, direct debit or cheque. Whichever payment method you choose you must ensure it is received by the deadline of midnight on 31st January.
You miss the deadline?
You will have to pay a penalty. If you are up to three months late, the penalty is £100. After that, the penalty increases.
You make a mistake?
My TOP TIP here is don’t!!
- Don’t leave it to the last minute
- Don’t rush when you’re completing the return.
- Don’t forget to check and double-check before you press submit (or post your form).
However, if you do find a mistake has been made, you have until the filing deadline next year to make changes.
You can’t pay?
Don’t ignore the situation!
If you’re unable to pay because your business has been affected by the Coronavirus Pandemic, the government has put lots of help in place for businesses. https://www.gov.uk/coronavirus/business-support
If you don’t think you are eligible due to not meeting their published criteria, contact HMRC to ask for their advice.
If you simply can’t afford to pay, contact the HMRC Business Payment Support Service. This service is available to everyone, not just businesses.
HMRC will consider how much you owe, what your income and expenditure is, your assets, savings etc in order to decide if you’re allowed more time to pay.
Please remember that tax is a priority debt. This means that you will face enforcement action if you refuse, or fail, to pay. In the worst case scenario, this could result in court action, bankruptcy or having your business shut down.
Need more help with your self assessment?
The easiest way to ensure you stay on the right side of HMRC is to enlist an expert to help. You’ll save yourself time, stress and sleepless nights, and have the peace of mind that your self assessment tax return is accurate.
All the team at Accountancy Solutions are dab hands at streamlining your bookkeeping, revolutionising your receipt storage and taking care of your tax returns.
To find out how we can help you, email firstname.lastname@example.org