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What is a Self Assessment tax return?
A Self Assessment tax return is a system used by HM Revenue and Customs (HMRC) to collect Income Tax.
Employees’ tax is usually deducted automatically from their wages. But income that HMRC doesn't yet know about, such as profit from a business, usually has to be declared in a Self Assessment tax return.
Completing a Self Assessment can seem daunting at first, so we’ve put together some key information and top tips to help make your tax return less taxing.
Deadlines for Self Assessment tax returns
As a business owner, you have a lot to keep track of and it can be hard to stay on top of tax deadlines. But to avoid getting fined, you need to meet the deadlines for registering for Self Assessment, filing your tax return and paying your Income Tax.
|6 April||Start of the new tax year|
|5 October||Deadline for registering for Self Assessment|
|31 October||Deadline for paper Self Assessment tax returns|
|30 December||Deadline to file should you want HMRC to collect tax owed via PAYE|
|31 January||Deadline for online Self Assessment tax returns|
|Deadline to pay the tax you owe for the previous tax year|
How to register for Self Assessment
There are different ways to register for Self Assessment, depending on whether you’re self-employed, not self-employed or registering a partner or partnership. The way you register may also vary depending on whether you’ve previously submitted a Self Assessment tax return.
Most people can choose whether to register online, by post or through an agent. It can take up to 20 days to register for Self Assessment, so be sure to allow plenty of time.
Top tips for completing your Self Assessment
Do your research so you don’t miss out
Before starting your Self Assessment, do some research to find ways to save time and pay the right amount of tax.
HMRC’s website is a good place to start. It has plenty of support for Self Assessment tax returns, including videos, webinars, toolkits and how-to guides. HMRC also has a Self Assessment helpline (0300 200 3310 – available Monday to Friday, 8am to 6pm).
You might be asked some security questions, so make sure your details are up to date in your personal tax account.
Claim your rightful tax allowances and reliefs
Taxpayers can claim several tax allowances and reliefs. HMRC has a detailed list of expenses that can be claimed, as well as Income Tax reliefs and personal allowances.
You should do some research or seek professional advice to make sure you’re claiming everything you’re entitled to and don’t end up overpaying Income Tax.
Consider using simplified expenses
"Simplified expenses" is an HMRC-approved way of claiming business expenses using flat rates rather than actual costs, which can help save you money and cut back the time you spend filing your Self Assessment.
However, not everyone can use simplified expenses, as they can only be used by sole traders and business partnerships for costs related to vehicles, working from home and living on your business premises. And if you are eligible, you should use HMRC’s simplified expenses checker to make sure you won’t end up paying more tax by using this method.
Have all the right information to hand
When you complete your Self Assessment tax return, you’ll need your Unique Taxpayer Reference (UTR), your National Insurance number, records of earnings from all taxable sources, details of expenses and your P60 if you’re also employed and get paid via PAYE.
It’s important to have access to all the relevant information when you begin completing your Self Assessment tax return, as having to go and find hard-copy invoices, bank statements and receipts will make the process take much longer.
And once you’ve submitted your return, you should keep all your records stored safely for at least six years in case HMRC audits your submission.
Give yourself enough time
People often rush because they don’t give themselves enough time to complete their Self Assessment tax return. But the more you rush, the more likely you are to make mistakes. More serious errors can lead to a penalty if HMRC believes they’re the result of you being careless.
Leave plenty of time to complete the return thoroughly, paying due care and attention when entering data and ticking boxes. Once you’ve entered all your data into your Self Assessment tax return, double-check before submitting it to HMRC.
File your Self Assessment return early
Why put off completing and filing your Self Assessment? You don’t have to wait for the deadline. In fact, you can complete your return for the previous period from the day the new tax year begins.
There are several advantages to doing this. Firstly, you’ll know it’s out of the way and will be able to focus on the parts of your business that you enjoy most. Secondly, it can help you manage your financial planning by finding out how much you owe sooner. Finally, if you’re owed a refund you’ll get it earlier.
Use third-party Self Assessment software
Given that the process of completing and returning your tax return can be quite complicated, it’s worth remembering you can always use third-party Self Assessment software that makes completing and filing your tax return quicker and easier, while reducing the likelihood of mistakes.
How to fix Self Assessment mistakes
If you make a mistake when completing your Self Assessment, you could end up paying the wrong amount of tax. Fortunately, it's possible to amend a tax return to fix any errors.
If you submitted your tax return online, you can make amendments by logging into your account. If you sent a paper return in the post, you’ll need to download a new form and post the pages that need amending. And if you used third-party software, you should contact the software provider for guidance – if they’re unable to help, contact HMRC directly.
Any changes must be made within a year of the tax return deadline. If you miss this deadline, you’ll need to contact HMRC to find out whether you can still fix any mistakes.
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This content has been created for general information purposes and should not be taken as formal advice. Read our full disclaimer.