Self Assessment

Do I need to complete a Self Assessment?

As a general rule, anyone who receives income that isn't taxed at source needs to complete a Self Assessment. You will normally only need to complete a form if one or more of the following apply to you:

• You are working for yourself i.e. you are self employed
• You are a partner in a partnership business
• You are a company director (except for directors of not-for-profit organisations who receive no pay)
• You have untaxed income from a rental property, a pension, investments or a trust
• You have taxable foreign income
• You have income from savings and investments of £10,000 or more before tax
• You have annual income of £100,000 or more before tax
• You or your partner receive child benefit and your income is over £50,000. This is because of the high income child benefit charge

There are many reasons you may be required to complete a return to HMRC. You can check out the full list here. It is ultimately your responsibility to find out if you need to submit a return to HMRC. If they have sent you a tax return or a notice to complete one, then you must fill it in and return it by the due date or you may have to pay a penalty.

How do I sign up for Self Assessment?

You can usually sign up for Self Assessment online through the www.gov.uk website. By registering online, you will be issued with you 10 digit Unique Tax Reference (UTR) and be enrolled into the online service to complete your returns online.

If you prefer you can call HMRC on 0300 200 3310 to set yourself up. Have you National Insurance number ready when you call.

The deadline for registering is by the 5th October after the end of the relevant tax year. For example, the tax year that ran from 6th April 2017 to 5th April 2018, the deadline for registration is 5th October 2018.

What expenses can I claim?

We've put together a really handy video guide to give you some more information on the expenses you can claim if you are self employed. Check out our handy hints and tips here.

When do I need to submit and pay my self Assessment?

If you need to file a Self Assessment then you’ll need to complete it and submit it to HMRC (usually online) before the 31st January deadline. HMRC will use the information you provide to calculate how much Income Tax and National Insurance you’re required to pay.

The deadlines for paying your tax bill are:

31 January for any tax you owe for the previous tax year (this is called the balancing payment) and your first payment on account.

31 July for your second payment on account.

Payments on account are advance payments towards your tax bill. If your last tax bill was over £1,000 you will be required to pay half of next years tax bill on the 31 January and the second half by the 31 July. For example;

Your first tax bill for the 2016/17 tax year is £3,000. Your payments will be as follows

Due 31 January 2018:
Balancing Payment - £3,000
First Payment on account for 2017/18 - £1,500
Total due 31/1/18 - £4,500

Due 31 July 2018
Second Payment on account for 2017/18 - £1,500

When your second tax return is completed for the 2017/18 tax year, your actual tax bill is calculated as £3,400 (i.e. £400 more than expected). Your payments on account for the second year will be;

Due 31 January 2019:
Balancing Payment - £400
First Payment on account for 2018/19 - £1,700
Total due 31/1/19 - £2,100

Due 31 July 2019
Second Payment on account for 2018/19 - £1,700

What if I get a penalty for not registering or filing on time?

If you fail to notify HMRC that you need to submit a Self Assessment return or you fail to submit your return once you've registered, you can incur some fairly significant penalties. HMRC are very strict on deadlines and penalties for late returns and unless you have a really good excuse then its likely you will have to pay the penalty.

You'll get a penalty of £100 if your tax return is up to 3 months late. You'll have to pay more if its later or if you pay your tax bill late.

If you have received a penalty and are not sure if you can appeal against it, then contact us for more information.

How much will it cost me to use an accountant

It's difficult to say how much it will cost because everyone's tax return is different and some are quicker to do that others. Prices start from £100+VAT but we will be happy to meet anyone who isn't sure if they need the help of an accountant for a free no obligation meeting. As we really don't like to do work and charge you unnecessarily, if we think your tax return is simple enough to do yourself then we will help to point you in the right direction. If we think we will be able to provide you with value by helping you to reduce your tax bill or save you the stress of getting in wrong then we will be able to step in and give you a fixed fee price up front for doing the work.

You can't go wrong by getting in touch and having a chat with us over a cup of tea.