The deadline for your self-assessment tax return is fast approaching and, if you make over £1,000 from your self-employed business or are another of the individuals who need to complete one, you need to get it done now – unless you’re willing to pay a hefty financial penalty.
“But,” you might be asking, “surely it doesn’t matter that much or even take that much time?”
Don’t be fooled, though. It is in the best interests of you and your business to get started today.
We understand you may be pressed for time and need a helping hand, though, so follow this guide to get your self-assessment tax return done in the quickest time possible.
How do I access my self-assessment tax return?
There are two ways to do your self-assessment tax return: online using the HMRC website, or via post or commercial software.
You must use one of the second methods:
- for a partnership
- for a trust and estate
- if you receive income from a trust
- if you get income abroad as a non-resident
- if you’re a Lloyd’s underwriter
- if you’re religious minister
- to report profits made on selling or disposing of more than one asset.
The deadline for paper forms is 31 October after the tax year ending 5 April you are filing for, which of course, has passed. Given this, and how streamlined and easy to understand HMRC’s self-assessment is, we recommend you do yours online.
To gain access, you will need your unique taxpayer reference (UTR), which you will receive when you register to do your self-assessment on the gateway portal.
HMRC can send this via post within 10 working days, but it can also supply it digitally. Just follow the instructions as you go along – HMRC has made it rather simple on their part.
If you have done a self-assessment tax return before, you should have your UTR from HMRC already.
Of course, you will need a gateway account, so you should check you still have access to yours. Not having access could cost you valuable time.
How do I fill out a self-assessment tax return?
Once you have entered your UTR, you will be able to complete your tax return. They are split into two sections, the main section being SA100, which deals with:
- taxed and untaxed income in the form of dividends and interest
- pension contributions
- charitable donations
- benefits, including state pension and child benefit.
It will be useful if you have all the information relevant to each subsection before you get started.
At first, SA100 can seem complex, but just know there are sections that may not be relevant to you, such as student loan repayments or marriage allowance, so try not to be perturbed if it seems complicated.
If you have extra income to declare from self-employment, property or capital gains, you will also need to fill in a supplementary page.
If you are:
- self-employed, you need to complete SA103
- reporting property income, fill in SA105
- declaring capital gains, use SA108.
It is here you report income from sources you have not paid tax on. You will also get to declare any allowable expenses, which will be deducted from your tax bill – essential if you want to ensure you pay only what you need to.
How to pay your tax bill
Once you have submitted your self-assessment tax return, you will be told how much tax you owe and, if you are self-employed, the National Insurance contributions you have to pay.
The deadline for payment is 31 January.
You can pay in instalments, which are advances on your next tax bill, or arrange a budget payment plan through your online account and decide how much you pay each week or month.
There are various ways to pay your tax bill, the length of time depending on which method you choose.
As we are approaching the deadline, it would be wisest to do it online or via telephone banking. You may also arrange for a bank transfer, direct debit or send a cheque.
If you have an outstanding payment or are worried about missing a future one, you should contact HMRC for support.
Rest assured, it’s being handled
As you can see, there is quite a lot that goes into self-assessment, and the more complex your financial situation is, the more difficult it can be to report your income and expenses correctly, on time and in a tax-efficient manner.
With the help of PMC Partnership, you can continue business with a clear head, knowing your tax return is being done for you, correctly and efficiently.