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Whether you’re a self-employed business owner or have undeclared earnings from a limited company or other sources, you may have to report your income to HMRC on a Self Assessment tax return. This is something that you can carry out entirely online and free of charge, with or without the help of an accountant.
Below, we explain the steps required to prepare and file your Self Assessment tax return online by the 31 January deadline. This guide is for informational purposes only. If you require professional advice, please contact HMRC or consult an accountant or tax advisor.
Filing a Self Assessment tax return with HMRC
Filing a Self Assessment tax return is an essential requirement for people with untaxed income. It can seem a little daunting at first, but it’s not too much of a challenge if you keep accurate records and are prepared and organised.
Whilst it is possible to submit a paper tax return by post, around 96% of Self Assessment customers choose to send their tax returns via HMRC’s secure online filing service. The online option is quicker, easier, and gives you an extra 3 months to file.
Many people complete their own tax returns, either to save money on accountant fees or because their income and expenses are relatively straightforward. In some cases, however, enlisting the help of an accountant or tax advisor may be beneficial.
It really depends on the complexity of your circumstances, whether you feel confident in your knowledge and understanding of the rules and requirements, and your ability to complete your tax return accurately and on time.
Whatever the case, if you need to send a Self Assessment tax return to HMRC, there are several steps involved in the process.
Step 1: Register for Self Assessment
You need to register for Self Assessment online before you can file a tax return. This step will be necessary if:
- you are sending your very first tax return, or
- you have sent a tax return in the past but did not file one in the last tax year
The registration deadline is 5 October after the end of the tax year that you are reporting in your return.
For example, if you need to file a tax return for the current 2023/24 tax year, which ends on 5 April 2024, the registration deadline is 5 October 2024. It is still possible to register after the deadline, but HMRC may impose a late registration fine.
If you have a business tax account with HMRC already, you can register by signing in to your account and adding the Self Assessment service. Otherwise, you will need to create a Government Gateway user ID and password during the registration process.
Once registered, HMRC will send you a Unique Taxpayer Reference (UTR) and an activation code. You will use these details to sign in to your business tax account and activate Self Assessment.
Step 2: Make sure you have all of the necessary information
Before starting your tax return, make sure you have the following information to hand (where applicable):
- 10-digit personal Unique Taxpayer Reference (UTR)
- National Insurance number
- details of your untaxed income from the tax year you are reporting, including earnings from self-employment, dividend income, and any UK interest you have received
- taxed earnings from employment
- records of expenses and benefits relating to self-employment and employment
- contributions that you have made to personal pensions or charity
- any State Benefits you have received
- details of Student or Postgraduate Loan repayments
It is important to include your income from all sources in your tax return, even if you have already paid tax on some of it. This is to ensure that you are charged the correct amount of Self Assessment tax and National Insurance contributions based on your total earnings for the year.
You do not have to send evidence of your income and expenses with your tax return. However, HMRC may ask you to produce receipts and records in the future.
Step 3: Complete your tax return
The main section of the Self Assessment tax return that you need to complete is SA100. There are also supplementary pages (SA101 to SA110) that deal with other types of income.
If you complete your tax return online, the main section and supplementary pages are presented as one continuous form, so there is no need to attach and file multiple parts.
HMRC provides in-depth guidance on how to fill in your tax return. You should read this beforehand to ensure that you understand the process and have everything you need.
Each field in the online Self Assessment form also provides helpful explanations. Simply click on the ‘?’ next to any field if you are unsure about what to enter in a particular part of the form.
SA100 – the main section
The first part of the main section confirms your personal details. This includes your date of birth, name and address, telephone number, and National Insurance number.
This next part covers only certain types of income, including:
- taxed and untaxed interest
- dividends from shares
- UK pensions
- taxable state benefits
- any other UK taxable income that is not reported on supplementary pages
If you are the director and shareholder of a UK limited company, this is the section where you will report dividend income and allowable expenses that you received from your company. Self-employed income is dealt with in a later section.
You will complete this part of the tax return if you need to report any of the following:
- payments you made into registered pension schemes, retirement annuity contracts, and overseas pension schemes
- charitable donations, including Gift Aid donations and the value of any qualifying shares, securities, land, or buildings that you gifted to charity
- Blind Person’s Allowance
If you need to report other less common reliefs, you can do so in the ‘Additional information’ sections later in the return.
Student Loan and Postgraduate Loan repayments
You must complete the Student Loan and Postgraduate Loan repayments section of the tax return if the Student Loans Company has told you that your repayments were due to start on or before 6 April of the tax year that you are reporting in the return.
High Income Child Benefit charge
Complete this section if you or your partner are in receipt of Child Benefit and your income was over £50,000.
You only need to fill in this section if your income for the tax year that you are reporting in the return was less than the annual Personal Allowance (currently £12,570) and you wish to transfer some of your own Personal Allowance to your spouse or civil partner.
The rest of the tax return comprises several supplementary pages in which you can provide additional information about taxed and untaxed income from other sources, as well as any allowable expenses you are claiming.
You will need to complete some of these sections if you are employed or self-employed, reporting income from property, or declaring capital gains. There are 18 supplementary pages in total, including the following most common ones:
SA102 – Employment
Complete this section of the return if you need to report income from employment, including any director’s salary you receive from a limited company. You can also declare any employment benefits and expenses from your employment or directorship.
SA103 – Self Employment
You must complete this section if you earn any money through self-employment, for example, as a sole trader, contractor, or freelancer.
Include a description of your business and all income and allowable expenses. The online form will automatically calculate your profit or loss and how much Income Tax and National Insurance (if any) you owe on your earnings from self-employment.
You do not have to include proof of income and expenses with your tax return, but you must keep your records and receipts for at least 5 years. HMRC may ask for this information at a later date.
SA104 – Partnership
If you are a partner in a UK business partnership, limited partnership, or limited liability partnership (LLP), you will need to complete this section of the tax return.
You must include details of the partnership and your share of the partnership’s trading or professional profits or losses.
SA105 – UK property
Complete the UK property supplementary pages if you received more than £1,000 from:
- rental income and other types of income from UK land or property
- income from letting out furnished rooms in your own home
- income from furnished holiday lettings (FHL) in the UK or European Economic Area (EEA)
- premiums from leasing UK land
- inducements to take an interest in letting a property (a reverse premium)
If your total income from property, including any foreign property, is less than £1,000 in the tax year, it is exempt from tax and you do not have to report it on a Self Assessment tax return.
SA108 – Capital gains
Fill in the Capital Gains Tax summary section if you need to report capital gains and losses, including if:
- you sold or disposed of chargeable assets that were worth more than £49,200
- your chargeable gains before deducting any losses were more than £12,300 (the ‘Annual Exempt Amount’)
- you have gains from an earlier year that are taxable in this period
- you are claiming an allowable capital loss or making a capital gains claim or election for the year
- you were not living in the UK and are claiming to pay tax on your foreign gains on a remittance basis
- you are chargeable on the remittance basis and have remitted foreign chargeable gains from an earlier year
- you made disposal of the whole or part of an interest in UK property or land when you were either non-resident or UK resident, and the disposal occurred in the overseas part of a split-year
Capital Gains Tax can be complex, so you may benefit from professional advice from an accountant or tax advisor if you are unsure about your circumstances.
HMRC’s Capital Gains Manual provides detailed guidance on the rules and requirements.
Step 4: File and save your Self Assessment tax return
Once you have completed your Self Assessment tax return online, check it over thoroughly, file it with HMRC, and save a copy for your records. You can also view your tax return in your business account after submission.
If you realise after filing your return that you have made a mistake, you can amend it online within 12 months of the Self Assessment deadline. However, you will need to wait 3 days after filing before you can make any such updates.
Step 5: Pay any tax that you owe to HMRC
If you owe any tax or National Insurance contributions to HMRC, you are responsible for paying your Self Assessment tax bill in full by 31 January. This payment deadline falls after the end of the tax year.
Depending on how much tax you owe, you may also have to make two ‘payments on account‘. These are advance payments toward your next tax bill (not the bill for the tax return that you have already submitted).
Payments on account are required every year if your last Self Assessment bill was more than £1,000. Each payment is half of your previous year’s bill, so they are just estimates.
This means that you may have to make a first payment on account by 31 January at the same time as paying your current tax bill, and then a second payment on account by 31 July of the same year.
If you owe more tax after making these two payments on account, you must settle the remaining balance by 31 January the following year.
Who is required to file a Self Assessment tax return?
Many individuals are required to file a Self Assessment tax return with HMRC, including:
- sole traders and other self-employed people who earn more than £1,000 in a tax year
- self-employed partners in business partnerships
- shareholders and some company directors
- anyone whose total annual taxable income is over £150,000
- people who pay the High Income Child Benefit Charge
You may also be required to complete a tax return if you receive untaxed earnings from tips and commissions, income from savings and investments, or foreign income.
If you are unsure, you can use HMRC’s online tool to check if you need to send a Self Assessment tax return.
Self Assessment dates and deadlines
There are several Self Assessment deadlines to be aware of. For the current 2023/24 tax year, which runs from 6 April 2023 to 5 April 2024, the deadlines are as follows:
- Register for Self Assessment – 5 October 2024
- File a paper tax return by post – midnight on 31 October 2024
- File a tax return online – midnight on 31 January 2025
- Pay your Self Assessment bill – midnight on 31 January 2025
Failure to meet these deadlines can result in penalties, as well as interest being charged on late payments of any outstanding tax that you owe.
If you need to send a tax return for the 2022/23 tax year, you must file your return and pay any tax and National Insurance contributions that you owe by midnight on 31 January 2024.
Should I use an accountant to prepare my tax return?
You are under no legal obligation to use an accountant to prepare and file your Self Assessment tax return. It’s entirely up to you and whether you feel competent doing it yourself.
Taking the DIY approach will save you money in accountant fees, of course. However, if your income or expenses are particularly complex, it can be an incredibly time-consuming task to take on yourself. Moreover, you could make a costly mistake (which could lead to fines) or miss out on expenses, allowances, and tax reliefs that could reduce your tax bill.
If you are unsure, why not book a free initial consultation with an accountant to see what they can do for you. This will help you to decide if it’s a worthwhile expense. And if it is, your accountant fees will be tax deductible!
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Please leave a comment below if you have any questions about this post. For more tax guidance, small business advice, and information on setting up and running a limited company, visit the Rapid Formations Blog.