January- a month that the majority dread. With the festivities a distant memory, the unpredictable weather and still trying to figure out what day it is, add the Self-Assessment Tax deadline into the mix and you may feel like you’re ready for the end of the year already!
But fear not, we’ve asked Shannon Steele, Tax Manager, to outline everything you need to know so that you’re prepared and ready for the 31st January.
Take it away Shannon
The deadline is fast approaching to complete your tax return. Whilst you may have already started the process, I’ve pulled together what I like to call ‘Shannon’s Super Safeguarded, Self-Assessment Tax Deadline Tips,’ to ensure you have everything needed to meet the deadline.
What is a Self-Assessment Tax Return?
Firstly, let’s start with the basics. A Self-Assessment is essentially a system that HMRC uses to collect income tax. Individuals who have earned income that HMRC doesn’t know about yet, like profit from a business for example, must report that income to HMRC in a Self-Assessment tax return.
Common situations where you have to fill in a Self Assessment are:
- If you’re self employed (unless your income is within the annual £1,000 trading allowance)
- You’re a Partner in business
- You’re a Company Director and have income where tax is due, that is not taxed through Pay As You Earn (PAYE)
- You have property income
- You want to claim tax relief on employment expenses- over £2,500 in a year
- You have to pay a tax charge on your child benefit (when your income is over £50,000)
- You have untaxed investment income over the limit
- You need to pay Capital Gains Tax
- Your income is over £100,000
Whilst this isn’t a complete list, it gives you an idea of who needs to complete a Self-Assessment. A full list can be viewed on the Government’s website – Self Assessment Tax Returns. If you want to make voluntary Class 2 National Insurance contributions, you can also fill in a Self-Assessment. This will help you to qualify for benefits like the State Pension.
What you need to fill out a Self-Assessment Tax Return
I know it can be daunting if you’ve never filled in a Self-Assessment tax return, but believe it or not, it’s not as scary as it sounds! As long as you have all the information needed, it can be relatively simple- I know you can’t believe ‘tax’ and ‘simple’ can be put together but hear me out…
Before you make a start on the assessment, you’ll need to make sure you have:
- Your ten-digit Unique Taxpayer Reference (UTR)
- National Insurance Number
- Details of your untaxed income from the tax year (this includes income from self-employment, dividends and interest or shares)
- Any records that relate to self-employment expenses
- Contributions to charity or pensions that could be eligible for tax relief
- P60 or any other records that show how much income you’ve received that you have already paid tax on
How to Fill in a Self-Assessment Tax Return
Now you have all the information needed, it’s time to fill it in! It’s important to note that if it’s your first time, you’ll need to apply for a UTR when you register online. It can take up to 10 days to arrive by mail so submit your application now to ensure that you have sufficient time to activate your account.
Personal Information
The first part of the form will require your personal information. This includes your name, address, National Insurance number and UTR. Make sure to check, check and check again the information before moving onto the next step.
Report your income
The income section is next, where you’ll need to provide details of your earnings. If you are employed, you need to refer to your P60 and payslips to accurately report your income. For self-employed individuals, enter the income generated from your business activities. Don’t forget to include any additional income sources, such as rental properties or investments!
Declare Deductions and Expenses
To reduce your taxable income, it’s crucial to declare any allowable deductions and expenses. For self-employed individuals, this can include expenses such as office supplies and travel costs. Refer to your receipts and invoices to ensure accurate reporting. A good time to remind you to always keep your receipts!
Review and Submit
Perhaps the most terrifying part, but you’ll feel a sense of relief once you hit that submit button. But before you do, ensure all figures entered are accurate and correct. Once you’re confident everything is accurate, you can hit submit.
Retain a Copy
After submitting, it’s important to retain a copy for your records. You can download this as a PDF version of your tax return from your HMRC online account. This will give you peace of mind if you have any queries in the future.
And that’s it! Although it can seem like a complex task at first, if you follow these steps and make sure you have the required information, you can have confidence in knowing that you have submitted your self-assessment tax return correctly. It’s important to note that there is an automatic £100 late filing penalty if your self-assessment is not submitted by 31st January 2024.
Still not sure?
If you’re not certain about what filling out a self-assessment means for you or your business, we can help. As we like to say, stress less, assess less! We can make sure that you claim all the allowances and reliefs that you are eligible for, as well as providing expert advice on tax planning and wealth management. To speak to one of our experts about any queries in regards to the Self-Assessment deadline, our terrific tax team are here to help.
