Self Assessment is daunting for any new business owner.
With so much information out there, it can get very confusing when trying to find out if you need to complete a tax return and how you register with HMRC.
A Self Assesment tax return is used by HMRC to collect Income Tax. When you’re employed, tax is usually deducted automatically from your wages, pensions and savings.
However, if you run your own business, you need to let the tax people know how much you earn so they can calculate the right amount of tax for you to pay.
Self Assessment is often approached with a sense of dread – we get it, who wants to do all that admin only to be greeted with a massive bill at the end of it?
But, unfortunately, Self Assesment is a reality, and you’ll face huge penalties for skipping or delaying your tax return or any payments.
We’re here to take the worry away. Keep reading to discover who needs to file a Self Assessment tax return and how you go about it.
Do I need to fill out a Self Assessment tax return?
If you’re self-employed or a sole trader and have earned more than £1,000 in the last tax year (6 April to 5 April), you’ll need to file a tax return.
You must also self assess if you’re a partner in a business partnership.
In some cases, you’ll also have to send one for untaxed income that comes from:
- Savings, investments and dividends.
- Tips and commission.
- Rental income.
- Foreign income.
If you’re unsure about if you need to file a Self Assessment tax return, you can check here for free. Or, get in touch with us and we’ll point you in the right direction depending on your specific circumstances.
When is the deadline for Self Assessment?
|Register for Self Assesment||5 October|
|Paper tax returns||31 October (midnight)|
|Online tax returns||31 January (midnight)|
|Pay the tax you owe||31 January (midnight)|
What happens if I don’t file my Self Assessment tax return?
Like with most things, avoiding Self Assessment won’t make it magically disappear.
This way, you’ll have time to make sure the information you’re submitting to HMRC is accurate, and you can be prepared for the bill at the end of January.
If you do miss the deadline for submission, you can face a £100 fine if it’s up to three months late. You’ll also get fined for late payments.