Self Assessment Tax Return Guide

posted by 1 week ago in Guide
Self Assessment Tax Return Guide

If you’re reading this article on the date it was published, the deadline for online Self Assessment tax returns is nearly here. You must complete and submit your online Self Assessment by the 31st of January. If you need clarification on any aspect of your Self Assessment, you’ve come to the right place. This guide covers everything you need to know about completing and submitting an online Self Assessment tax return.

What is a Self Assessment Tax Return?

Put simply, a Self Assessment tax return allows your business to declare to HMRC how much your Income Tax business needs to pay for the tax year you’re assessing. Income Tax is the tax you must pay on your business’s profits during the applicable tax year.

As with any project, before starting your Self Assessment, it’s crucial to allow yourself time to research the most effective routes to completing your tax return. Doing so will help you assess the right amount of tax to pay.

Who Needs to Complete a Self Assessment Tax Return?

According to the gov.uk website, you need to complete a tax return if any of the following apply to your business during the last tax year (from 6th April to 5th April):

  • You were self-employed as a ‘sole trader’ earning more than £1,000 (before any tax relief)
  • You were a partner in a business partnership
  • You earned £100,000 or more

You might need to complete a tax return if you received untaxed income from any of following sources:

If you’re unsure whether you need to complete a tax return, you can find out easily by completing the gov.uk Self Assessment checking tool.

Self Assessment Deadline

What is the Self Assessment Deadline?

It’s essential to be aware of the Self Assessment tax return deadlines. In addition to ensuring you have time to complete your Self Assessment, you’ll avoid getting fined by keeping ahead of your tax return deadlines.

You should be aware of the following Self Assessment tax return deadlines:

Date Event
6th April Start of the new tax year
5th October Deadline for registering for Self Assessment
31st October Deadline for paper Self Assessment tax returns
30th December Deadline to file should you want HMRC to collect tax owed via PAYE
31st January Deadline for online Self Assessment tax returns
31st January Deadline to pay the tax you owe for the previous tax year

How to Register for Self Assessment

If this is your first time completing a Self Assessment, you’ll need to register to complete your tax return. How you register for Self Assessment depends on the structure of your business. Be aware that it can take up to 20 days to register, so allow plenty of time.

Self-Employed

You must register for a Self Assessment and Class 2 National Insurance by the 5th of October in your business’s second tax year. You can do this by signing into your business tax account via the gov.uk website using your Government Gateway login details. If you don’t have a user ID for a business tax account, you’ll need to create one.

Not Self-Employed

If you’re not self-employed, you must complete an SA1 form to register for Self Assessment, which you can submit online or by post.

Partner or in a Partnership

If you’re a partner or in a partnership, you must complete an SA401 form by the 5th of October to register for Self Assessment. As with the SA1 form, you can submit the SA401 online or by post.

3 Steps to a Successful Self Assessment

Before starting your Self Assessment, there are three simple steps which will make the whole process less stressful.

1. Allow for Enough Time Before the Self Assessment Deadlines

Few of us can claim not to have rushed through a project due to a looming deadline, but rushing can lead to mistakes. Self Assessment errors can result in HMRC imposing penalties if they believe you’ve been careless.

To prevent your business from receiving a penalty, ensure that you allow enough time to complete your tax return without making mistakes. By allowing yourself extra time to complete your tax return, you’re more likely to pay attention, avoid mistakes and allow yourself time to double and triple-check your Self Assessment before submitting it to HMRC.

2. Get Everything in One Place

You’ll need a few key pieces of information to complete your Self Assessment tax return. By ensuring you have all of this information accessible in one place before you start, you’ll make your life easier. The information you may want to get in one place includes the following:

  • Your Unique Taxpayer Reference (UTR)
  • Your National Insurance (NI) number
    • Details of your business’s finances, including the following:
    • Earnings from taxable sources
    • Expenses
  • Proof of finances such as bank statements, invoices and receipts.
  • If you’re employed and paid via PAYE, you’ll also need a P60.

Be aware that this task won’t just make your life easier for this year’s Self Assessment; it’s an important part of the Self Assessment process. HMRC can audit your tax return within six years after your submission. Because of this, after completing your tax return, ensure you safely store your records for at least six years.

3. Submit Your Self Assessment Early

If you’re keeping on top of your Self Assessment to the point where you can have it ready early, you don’t have to wait for the deadline. You can submit it much sooner. You can submit your tax return for the previous period as soon as you enter the new tax year.

You might wonder why you would want to do this. Beyond not having to worry about missing the tax return deadline, submitting your Self Assessment earlier allows you to plan your business finances and pay your return. As a bonus, you could receive any tax refund you’re owed sooner.

£52 in cash

Claim Self Assessment Tax Allowances and Relief

If you’re a self-employed taxpayer, you’re entitled to a range of tax allowances and reliefs, including the following:

  • Office, property and equipment
  • Car, van and travel expenses
  • Clothing expenses
  • Staff expenses
  • Reselling goods
  • Legal and financial costs
  • Marketing, entertainment and subscriptions
  • Training courses.

You can view the full details of what allowances and relief you’re entitled to on the HMRC website. By doing a little research, you should avoid overpaying your Income Tax.

How to Make Self Assessment Easier

Completing a Self Assessment isn’t as complicated as it may at first seem, but if you’re still daunted by doing a tax return, there are ways to make it easier.

Self Assessment Apps and Software

While you can complete and submit your Self Assessment via the HMRC website, third-party Self Assessment apps and software can help. They usually make completing and filing your tax return quicker and easier, with the added benefit of reducing the chances of making a mistake.

Many business bank accounts come packaged with free bookkeeping software to help you with your Self Assessment. Whether you already have a business bank account or you’re looking for one, it’s worth comparing bank account features to find the best one for your business.

Simplified Expenses

Simplified expenses allow certain businesses to claim expenses using flat rates rather than actual costs. It’s an HRMC-approved way of saving money, with the added benefit of making it quicker and easier to complete your Self Assessment.

You can use flat rates for the following expenses and calculate all other expenses by working out the actual costs:

To be eligible for simplified expenses, you must be a sole trader, or in a business partnership wherein none of the partners are companies. Subsequently, limited companies aren’t eligible for simplified expenses.

What Happens if Something Goes Wrong?

We’re all human. Mistakes happen. Unfortunately, a Self Assessment tax return error could result in a penalty or your business paying the incorrect amount of tax. If you think you’ve made a mistake after submitting your Self Assessment tax return, don’t panic! You have a year within the tax return deadline to fix any errors you’ve made. If you miss this deadline, you’ll need to contact HMRC.

How to Fix an Online Tax Return Mistake

You can make amendments by logging into your account.

How to Fix a Postal Tax Return Mistake

Download a new form and post the pages that need amending.

How to fix a Self Assessment Software Mistake

Contact your software support team. They may be able to help, but if not, you should be able to contact HMRC directly to resolve the issue.

HM Revenue & Customs sign

Paying Your Tax Bill

Hopefully, completing your Self Assessment tax return isn’t as daunting as it may have once seemed. However, there’s one more step to take. You need to pay your tax bill. If your circumstances have changed or you’re facing a shortfall of your total tax bill amount, we can help. We compare UK lenders who offer a range of business finance products, including Business Tax Loans. It only takes a few minutes to find the best rate on a tax loan for your business, so click below to compare today.

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