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A Guide to Filling Out & Understanding Your Self Assessment Tax Returns

Your self-assessment is one of the most important things to take into account when you become self-employed. It’s critical that the return is filled out correctly and submitted on time, as there are penalties otherwise, so you’ll want to get it right the first time around.

As contractor accountants with years of experience, we can help. We’ve put together a self-assessment tax return guide with useful information for self-employed individuals, and we’re also able to assist with the return submission if you prefer. What our guide covers (feel free to jump to the most applicable section or read from the top!):

What a Self-Assessment Tax Return is

Who Has to Submit a Self-Assessment Tax Return

How to Register for Self-Assessment

Important Dates to Know About

Penalties for Late Payments

What You Need to Submit Your Return

Get Help from Specialist Accountants

What is a Self-Assessment Tax Return?

First of all, if you’re looking into becoming self-employed or are still a beginner, it’s crucial that you’re aware of which documents to fill out and why. After all, your taxes are deducted from your wages when you’re working for someone else – but, as soon as you become your own boss (even if on a part-time basis while you still work a more traditional job), you need to submit a self-assessment tax return. Since September 2017, some people who would normally submit a self assessment tax return are now eligible for Simple Assessment Tax, but you will know if this is you as you will receive a letter from HMRC.

A self assessment tax return form, is a document used by HMRC to calculate how much tax you need to pay based on your income. You have to do this once a year, either filing the return online or sending it by post to HMRC. In the document, you must declare your taxable income and capital gains, as well as the allowances and reliefs you’re entitled to.

Who Has to Submit a Self-Assessment Tax Return?

According to HMRC, you have to submit a self-assessment return if, in the last tax year, which runs from 6 April to 5 April, you were a sole trader who earned over £1,000 or a partner in a business relationship.

You may also need to submit a return if:

  • You’re a company director with income that is not taxed under the PAYE (Pay As You Earn) scheme.
  • You receive income from a trust, settlement or estate.
  • You have untaxed income from renting out a property, tips or commission and foreign income.
  • You have untaxed income from savings, investments and dividends.
  • You or your partner receive child benefits and your income is more than £50,000.
  • You have capital gains where you’ve sold or given assets worth £49,200 or more.
  • You want to claim certain tax reliefs.

There are other circumstances that may require the submission of a self-assessment tax return so, if you’d like to know if that is your case, talk to us. We’re sole trader accountants and can help out every step of the way.

How to Register for Self-Assessment

You have to register to submit the return, and there are different ways of doing it depending on whether you’re a sole trader, not self-employed or registering a partnership.

If you’re self-employed or a sole trader, you will have to register for self-assessment and Class 2 National Insurance by 5 October in your business’ second tax year. This means that, if for example, you’ve started trading on 10 February 2021, the latest date to register was 5 October 2021.

Some people may have sent online returns before. If you haven’t sent a return before, you can register online and will then receive a letter from HMRC with your UTR; after this, you can set up your account for the self-assessment service. You’ll receive an activation code that you will need to use to sign in.

business accountant bookkeeper in office looking at and working with laptop and income tax return papers and documents

Important Dates to Know About

In this self-assessment tax return guide, we also want to touch on key deadlines. When it comes to submissions, it’s crucial that you do it within the given timeline, since you’re at risk of being fined otherwise. The same goes for the money you owe – if you have to pay tax, make sure that you do it by the right deadline and, if you’re unable to, you need a reasonable excuse to avoid a penalty.

Reasonable excuses may include a sudden death in the family right before the tax return or payment deadline, an unexpected stay in hospital, a serious illness, a software or hardware failure before, or when, you were dealing with your return, a natural disaster and postal delays you couldn’t have predicted.

There are also some things that don’t count as reasonable excuses, including: relying on someone else to submit your return, failed payments due to lack of funds, finding the HMRC system too difficult to use, not getting a reminder from HMRC and making a mistake on the paperwork.

Generally, you should make sure that your return or payment is sent by:

Self-Assessment Tax Return Deadline
Register for self-assessment 5 October 2021
Submit paper tax return 31 October 2021 (Midnight)
Submit online tax return 31 January 2022 (Midnight)
Pay the tax you owe to HMRC 31 January 2022 (Midnight)

Penalties for Late Payments

You should do all you can to avoid HMRC penalties for late or incorrect returns; if you miss your deadlines, you will have to pay a penalty of £100. If you’re more than three months late, you may have to pay an extra £10 a day up to a maximum of £900 and, if you’re six months late, you have to pay a further £300 or 5% of the tax due, whatever is higher (this is on top of the existing penalties).

For those who are 12 months late, on top of the penalties highlighted above, they must pay an additional £300 fine or 5% of the tax owed and, if some cases, the fine corresponds to 100% of the amount of tax owed.

You have 30 days to appeal with HMRC if you’ve been issued a penalty you don’t believe is correct, but you’ll need a reasonable excuse, as mentioned, to avoid a penalty.

What is Required to Submit Your Return?

When it’s time to prepare and submit your self-assessment tax return, there are a few documents and information that you should gather in order to fill it out successfully. Besides your 10-digit Unique Taxpayer Reference, you also need:

  • Your National Insurance number.
  • A P60 form if you have an employer. This form shows the income and tax you’ve already paid.
  • A P45 form if you’ve left a job in the current tax year.
  • Details of your untaxed income, such as dividends and interest on shares.
  • Records of your expenses.
  • A P11D or P9D form that shows your benefits and expenses.
  • Information on any rental income you may have.
  • Documents that showcase your income, from receipts to bank statements.
  • Any potential contributions to charity.

Self-Assessment Tax Return at Gorilla Accounting

Gorilla Accounting are self-assessment tax return accountants, which means we can help you figure out your self-assessment and ensure everything is submitted correctly and on time.

We understand how time-consuming this can be, as there can be quite a lot of admin involved when preparing and submitting a return – this is time that you could be spending growing your business, so why not let us remove the hassle out of the process?

Having your tax return done by a professional will also give you peace of mind. After all, not only can it take a lot of time to fill out all the paperwork, it can be easy to make mistakes as well, as it can be a confusing process. Our expert accountants, on the other hand, know exactly what to do, since they have many years of experience helping self-employed individuals with their taxes.

You won’t have to stress about filling your forms incorrectly or worrying about missing a deadline when you choose Gorilla Accounting as your partner.

So, from just £100, we can prepare and submit your self-assessment tax return. What’s more, our experts will give you advice on how to minimise your tax liability, liaise with you on any queries, submit your return to HMRC and confirm the amount to be paid and when you have to pay it by.

Serious entrepreneur reading a letter

You will also find it easier to stay on top of your accounts, including your expenses and receipts, with FreeAgent accounting software. This tool will manage your transactions, help you create personalised invoices, chase payments automatically and provide you with crucial business information that you can access from anywhere in real time.

Additionally, because you have to keep a record of everything, FreeAgent makes your life so much easier, as you have all documents in one place. If HMRC wants to investigate your return for some reason, they’ll want to check your receipts, bank statements, transactions, and more, so you have to keep these for, at least, 5 years after the 31 January deadline of the relevant tax year.

Please don’t hesitate to contact us today on 0330 107 9676 to learn more about this self-assessment tax return guide or any other services we provide. When you choose to partner with Gorilla Accounting, you can also rest assured that we’ll answer any urgent queries you may have if you contact us by 3pm.