A step by step guide to self-assessment
Filing your own tax return might seem confusing at first, so we’ve compiled all the information needed for a tax return to make the process much simpler.
Tax affects all of us, and knowing what to pay and when to pay it can be somewhat confusing. You might find the whole process easier with the help of a personal tax advisor.
What is self-assessment?
self-assessment is the system that HMRC (HM Revenue & Customs) uses to collect income tax from those who have not paid it through PAYE – such as those who are self-employed or are renting out a property.
If your income comes from wages, interest on savings or a pension, then you won’t need to complete a tax return as your tax will have been deducted automatically.
Who needs to file a self-assessment?
You will need to file a self-assessment tax return if you:
- Are self-employed
- Earn more than £100,000 a year
- Are a company director
- Receive income from abroad
- Have savings or investment income, before tax, of more than £10,000
- If you earn over £50,000
- Earned £2,500 or more in untaxed income
- Are part of a household claiming child benefit and are the highest earner in the household
If you match any of the above criteria then you will need to file a self-assessment tax return for the current tax year.
What you will need to complete your tax return
It’s a good idea to gather everything you’ll need to file your tax return beforehand – this will make the process a lot simpler. Here are some things you might need to include:
- A P60 from your employer showing your income and any tax you might have paid
- A P11D or P9D to show any benefits or expenses
- A P45 if you have left your job in this tax year
- A summary of any rental income and expenses you might have
- Savings and investment statements to show how much you have earned
- Any documents to detail any income from your self-employment. This could include receipts, bank statements and accounts
How to do a tax return
There are two ways in which you can submit your tax return:
1. Postal applications
To file your tax return by post you’ll first need to obtain form SA-1 from the GOV.UK website and fill it in. This form tells HMRC that you need to submit a self-assessment tax return.
Once you have the go-ahead from HMRC, which could take up to four weeks, be sure to send it off well in advance, you can now fill in form SA100 to file your tax return.
2. Online applications
If you haven’t filed a tax return online before, you will need to register with GOV.UK first. Make sure you give yourself plenty of time as this could take up to three weeks.
Your self-assessment deadlines will differ depending on whether you’re sending your tax return by post or have chosen to do it online. Here are the key dates to look out for:
- 5th October – You’ll need to ensure you’ve registered for self-assessment by this date.
- 31st October – All postal tax returns should be received by this date
- 31st January – All online tax returns should be filed by this date. You’ll also need to pay your tax bill by this date.
What happens if you submit your tax return late?
If your tax return is up to three months late you’ll receive a £100 penalty from HMRC. Any later than three months and this penalty is likely to increase by £10 per day. But don’t worry, we’ve put together a complete self-assessment guide on what is likely to happen if you miss the self-assessment deadline.
You will, however, be able to appeal any penalties should you have a reasonable excuse – this includes the death of a close family member or a serious illness. Forgetting to file your tax return will not be considered a valid excuse.
With the self-assessment tax return deadline fast approaching, now is a great time to start filing your tax return. Take a look at our top five ways to streamline your self-assessment tax return and avoid any late penalties.
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