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When you’re self-employed you have the responsibility of managing your own tax affairs, from record keeping to submitting your tax returns to paying what you owe. This includes reporting your income each tax year in the form of a self-assessment tax return.
Some people refer to this annual filing as a self-employment tax return but that is a misnomer. Although the terms self-employment tax return and self-assessment tax return are sometimes used interchangeably, self-employment tax returns technically don’t exist and it’s actually a self-assessment tax return through which you report your income to HMRC when you’re self-employed or you receive untaxed income.
Now that we’ve clarified the correct terminology, let’s dig a bit deeper on self-assessment tax returns.
What is a Self-Assessment Tax Return?
Self-assessment tax returns are a key element of the UK tax system. Through the annual self-assessment, taxpayers that are mandated to file a return report their annual earnings to HMRC. This includes income from self-employment so that all taxable income is accounted for and any applicable reliefs or deductions can also be claimed. HMRC uses this information to calculate each individual’s tax liability before issuing a tax bill.
Self-assessments can be filed online or using a paper form, but the vast majority of people use the online option which presents various advantages. It’s important to file accurately and on-time because HMRC can levy significant penalties if your tax return contains errors or inaccuracies or if it’s submitted after the deadline. If it’s filed just a day late, an automatic £100 penalty will be triggered.
The self-assessment registration deadline is October 5th for the previous tax year and the submission deadlines are January 31st for online filings and 31st October for paper. The deadline to settle your tax bill is January 31st.
Who has to Complete a Self-Assessment Tax Return?
Over 12m people have to complete an annual self-assessment and it’s important to understand if you’re one of them so that you ensure that you’re compliant with your tax obligations.
Usually you will have to file a Self-Assessment if you are in one or more of the below categories:
- You’re self-employed and earning over £1k
- You claim child benefit and you or your partner earn over £60k
- You’re a partner in a business partnership
- You receive taxable income from investments or savings that’s over the £1k personal savings allowance
- You had total taxable income of more than £150k
- You received over £10k in taxable income from rental income or dividends
- You made a capital gain over the tax-free capital gains allowance
If you’re unsure you can use HMRC’s digital self-assessment tool to check if you have to file a return.
Tips For Successfully Completing Your Self-Assessment Tax Return
Completing your self-assessment accurately and filing it on time can be challenging so here are some tips to make the process less onerous.
Keep Meticulous and Organised Records
Keeping comprehensive and organised records of your business income and expenses is crucial to be able to accurately complete your self-assessment tax return. It pays to keep on top of your bookkeeping and do regular reconciliations rather than trying to organise everything at the last minute with the filing deadline looming.
Start It In Good Time
As well as good record-keeping, it’s important not to leave your self-assessment tax return late. By starting it in good time you give yourself some leeway and time to collate all the required documentation and complete the relevant sections. Starting it late and rushing to meet the deadline increases the chances of errors or omissions, not to mention actually missing the deadline, all of which could result in HMRC levying fines and penalties against you.
Monitor Any Legislative Changes
There are frequent updates to various aspects of tax legislation including changes on deductions, reliefs and rates. It’s important to keep up-to-date with any legislative changes that affect you to help ensure compliance with your obligations and that you’re not missing out on any potential reliefs and paying more tax than you need to.
How Can an Accountant Help with Your Self-Assessment Tax Return?
The simplest way to make self-assessment tax returns stress-free, and to minimise the chances of errors and penalties, is to engage an accountant, and this is where Gorilla comes in! We are self-assessment tax return experts and as the UK’s most trusted accountants, you can rely on us to help you meet your tax obligations.
If you’re a Gorilla Accounting client, completion and submission of your annual self-assessment tax return is included in our accountancy packages. On top of this you’ll work with your own dedicated accountant who will expertly manage all your business and personal accounting needs. They will be on hand to provide you with unlimited support and advice with a guaranteed same working day response. As part of our service we provide quarterly reviews which include making sure that you’re operating as tax-efficiently as possible to maximise take home pay.
You also receive industry standard FreeAgent cloud accounting software at no extra cost saving you up to £330 per year. FreeAgent provides a host of benefits with powerful functionality and comprehensive automation which makes bookkeeping a breeze. Your self-assessment tax return can even be filed with HMRC electronically at the click of a button.
We also offer an expert one-off self-assessment tax return service starting at just £200 + VAT for a basic return. We’ll handle the whole process for you from start to finish giving you peace of mind that you’ll meet your tax obligations whilst saving you the admin burden. Please complete our personal tax questionnaire and one of our expert self-assessment accountants will be in touch to start the process.
If you’d like advice on your self-assessment or to learn more about how our accounting service can help you, please call 0330 024 0406 to speak to an accountant or request a call back at your convenience here.
