SELF ASSESSMENT TAX RETURNS

Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax. The process involves completing and filing an annual tax return with HMRC within the specified timeframes and deadlines.

DO YOU NEED TO SUBMIT A SELF ASSESSMENT TAX RETURN? 

Most people in the UK usually have tax deducted automatically from their wages, pensions, and savings so they are not required to complete a Self Assessment. However, some people and businesses with other streams of income must report it in a tax return, this commonly applies to the following:

  • If you are self-employed (sole trader) who has earned more than £1,000 in the tax year
  • If you are a partner in a business partnership
  • If you are a director of a limited company that has income not taxed under PAYE
  • If you have an annual income above £100K or more before tax
  • If you receive child benefit and your (or your partner’s) income was over £50,000

You may also need to complete a Self Assessment tax return if:

  • You receive rental income,
  • You are a CIS subcontractor,
  • You receive income in the form of a dividend,
  • You have income from savings and investments of £10,000 or more before tax,
  • You want to claim certain tax reliefs on pension contributions, charity donations or maintenance payments,
  • If you are a trustee or the executor of an estate,
  • You are subject to capital gains where: You have given away or sold assets in the tax year, such as other properties or shares,
  • You receive regular annual income from a trust or settlement, or you receive income from the estate of a deceased person and further tax is due,
  • You are a non-resident and you have taxable income in the UK. This includes non-UK resident landlords,
  • If you have taxable foreign income (although there is an exclusion if your foreign income consists solely of less than £300 of dividend income).

Please note, if HMRC sends you a Self Assessment tax return or a notice to complete one, then you must fill it in and return it by the due date unless there is a good reason you do not need to be classified under Self Assessment and HMRC agree to cancel it.

If you are still unsure if you need to complete a Self Assessment tax return, then there is a tool on GOV.UK to help you.

DEADLINES FOR FILING

The tax year starts on the 6th of April and ends on the 5th of April. The most common way of filing a tax return is online and the deadline for online filing is January 31st following the end of the tax year. For example, for the tax year ending 5th of April 2020, the return will need to be filed before midnight on the 31st of January 2021. Any income tax and national insurance owing on the return are also due before midnight on the 31st of January.

Paper returns must be filed earlier than online returns, the deadline for paper returns is midnight on the 31st October following the end of the tax year.

If you file your tax return late you will usually pay a penalty unless you have a reasonable excuse to appeal. Interest may also be charged on the balance owed if it is not paid on time.

DO YOU NEED HELP COMPLETING AND FILING YOUR SELF ASSESSMENT TAX RETURN?

The completion and filing of online (or paper) Self Assessment tax returns can be quite lengthy and daunting if you are not familiar with them. Take the stress away by letting us prepare your Self Assessment without any errors or missed information. We assist sole traders, self employed, CIS subcontractors, and individuals who need help with their tax return.