A Guide to completing your self assessment tax return
Our short guide to self assesment tax returns
Do I need to complete a self assessment tax return?
If you are self employed, a sole trader, or a company director you will most likely need to fill out a self-assessment tax return in order to calculate your personal tax liabilities each year. (Company directors should not confuse this with the CT600 corporation tax return, which is filed to declare the tax liability of the company).
Your tax return can be filed either on paper or online. If you choose to file online, you get an additional 3 months to submit it. The dates by which you will need to complete your tax return are as follows:
Paper submission: 31 st October
Online Submission: 31 st January
The penalty for late submission is £100. You may also have to pay interest on any late payments.
What Information do I Need?
Some of the information you will need in order to complete your self assessment tax return includes:
Your ten digit UTR (unique taxpayer reference) number
Details of any employment income earned during the year ( you can get this from your P60 or P45)
Details of any amounts invoiced as a sole trader/self employed person, and any related allowable expenses incurred
Details of any bank interest and dividends received
Income received from properties, and details of related allowable expenses
Any tax that has already been deducted from your income
Details of any National Insurance that you have paid
It is very important that you keep all of your records in a safe and easily accessible place. HMRC can request to view them at any time, and you are legally required to keep your records for a minimum of six years after the end of the tax year which they relate to. Not doing this can result in a fine of up to £3,000.
Paying your tax bill
HMRC require you to make “payment on account” for the tax year in advance (unless your previous year’s tax was less than £1000). So if it is your first year of doing a self assessment, in addition to making payment for any tax due for the year passed, you will also need to pay the same amount again in advance to cover against any tax due next year. The advance payment is split into two instalments. The First instalment is due on the 31 st of January, and the second is due on the 31 st July. For subsequent years you will simply pay a balancing payment and a further payment on account.
Example
Tax bill for year 1 = £5,000
Payment to HMRC due on 31 st January = £7,500 (5,000 + (0.5 x 5,000))
Payment to HMRC due on 31 st July = £2,500 (0.5 x 5,000)
...Then in year 2
Tax bill for year 2 = £5,000
Payment to HMRC due on 31 st January = £2,500 (0.5 x 5,000))
Payment to HMRC due on 31 st July = £2,500 (0.5 x 5,000)
For more help on completing your self assessment tax return, please see the HMRC “How to fill in your tax return” booklet.
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