Do I need to fill in a self-assessment tax return?
You will need to fill in a self-assessment tax return in the UK depending on several factors. For starters, if your self-employment income is more than £1,000 before your expenses, then you’re supposed to fill in a self-assessment tax return.
How to register for a self-assessment tax return?
There are several ways to register for a self-assessment tax return if you’re:
- Not self-employed but need to declare income
- In partnership
Your unique taxpayer reference will be sent to you once you’ve registered.
What are the self-assessment deadlines?
You file tax returns in arrears for tax years rather than calendar years. If you are filing a paper tax return, you must file it by 31st October 2021, at midnight. If you are filing your return online, you’ll have until midnight on 31st January 2022 to pay the owed tax. You could be given a penalty fee if you miss some of these deadlines.
What information will I need to fill in a self-assessment return?
Filling in a self-assessment return for the first time can seem complicated, but once you look at it, you’ll realize how simple it is. You need to have all the necessary information such as your 10-digit unique taxpayer reference, your national insurance number, details of your untaxed income from the tax year (Including income from self-employment, dividends, and interest on shares), and records of any expenses relating to self-employment.
We also advise that you read the HMRC help sheets to guide you with the whole process relating to why you’re filling in the self-assessment tax return.
How to fill in the main tax return (SA100)
Reading the help sheets will help you fill in the SA100 correctly, so you must read it before starting the process.
This part is for declaring tax and untaxed income from interest earned from banks building society and dividends.
Pensions, Annuities, and State Benefits
If you are retired, you must fill out the following information on the forms:
- Complete amount of State Pension you were eligible to receive for the tax period
- The total of every lump sum State Pension
- The total value of every annuity or lump sum pensions (apart from the State Pension)
If you are applying for benefits, you need to fill out the following information:
- The sum of incapacity and job seeker’s Allowance earned
- Total bereavement allowance
- Carer’s Allowance
- Industrial death benefit
Other UK Income
This category is about any taxable income that isn’t linked to interest, dividends, or anything else on the supplemental sections.
You can also include any permissible expenditures and any income tax that has already been paid on this income.
These are any payments made after-tax into a registered pension fund, annuity arrangement, or employer’s plan.
Totals of Gift Aid contributions to charities over the course of the tax year. You may also enter the value of any bonds, securities, property, or buildings that have been donated to a charity.
Blind Person’s Allowance
Check to confirm if you are claiming the Allowance for a person that is blind.
Student Loan Repayments
Check to see if you’re on track to repay your student loan and any deductions taken by your employer.
High-income Child Benefit Charge
If you received Child Benefit and your income was over £50,000, you need to fill in this portion.
If your compensation for the tax year was less than the Personal Allowance and you want to give some of it to your partner, fill out this section.
How to complete the supplementary pages of a self-assessment tax return
If you make money as a self-employed person, you’ll be prompted to enter your earnings in the business income column. This is the sum of all the money you received during the tax year before any deductions on the expenses were made.
You can join this number individually if you do have many sources of self-employed income. However, the job that gives you more earnings is the primary job.
When submitting your Self-Assessment, you do not need to provide evidence of your expenditures, such as receipts.
UK property income (SA105):
If you’re a landlord, you need to enter leased property income into two different categories. The gross income from all furnished holiday lettings in the United Kingdom must be entered in the first section. You must enter the total income from furnished holiday lettings on a separate page if you have any in the European Economic Area (EEA). Fill in the gross rent and revenue from other properties in the second part.
You may claim expenses for rates, insurance, and rental income, management, asset maintenance, and repairs; loan repayments as well as other costs involved, legal and other related costs if you make money by renting out a property.
Capital Gains (SA108)
The income you must report for Capital Gains Tax is referred to as disposal proceeds. You’ll need to enter a different disposal proceeds number for residential land, non-residential property, and shares and securities.
Allowable costs can be claimed on a Capital Gains Tax return. These included: the price paid to purchase the asset in the first place, the cost of any upgrades and the price paid to sell the asset. Other costs associated with buying or selling the asset. It’s important to keep meticulous records so you don’t request the very same thing repeatedly.
Paying your self-assessment tax bill
After you’ve filed your Self Assessment tax return, you’ll be told how much tax you owe and, if you’re self-employed, you will have to pay national insurance contributions (NICs).
When do you need to pay?
The payments need to be done by 31st January, which is the deadline.
Can I pay my tax bill in installments
Payment can be made in installments, but they will be applied to the next tax bill.
How do I pay my tax bill?
You can pay your tax bill in various ways, but the amount of time it takes differs according to which form you select. If you’re paying close to the deadline, you can take one of the quicker choices to avoid being charged a late fee.
The quickest ways to pay are by online or mobile banking, debit card, Clearing House Automated Payment System (CHAPS), or corporate credit card. You can also make the payments n person at the bank. Bake transfers or checks or direct debit are also acceptable.
What if I miss the deadline?
You will be penalized if you fail to enroll, file your return, or pay your bill by the deadline. There’s also a £100 penalty if you are more than three months overdue filing or paying the bill. If it is not done by this time, the penalty will be increased. Late payments can also incur interest charges. You can appeal if there is a good reason for that.
What if I make a mistake?
If you discover an error after you’ve filled, you have until the following year’s filing deadline to correct it. This means you have until 31st January 2022 to make adjustments to the tax return you filed by 31st January 2021.
Payment on account
You will be requested to create payments based on your next tax payment if you already paid 80% tax that you owe or when your self-assessment tax bill is not greater than £1000. The payments can be made in two installations, each half of the previous years’ tax bill. These are due on 31st January and 31st July.
For instance, if your taxable income for 2018 – 19 reached £1,500, you would make two £750 transactions on account during the 2019 – 2020 tax year. These two fees will be deducted from the taxable income once you file the 2019/20 tax return.
So, if the taxable income for 2019 – 20 were £3,000, then £1,500, that is to say, two transactions on account would be deducted, so you’ll have to pay £1,500 as a balance charge, plus an additional £1,500 as your first payment made for 2020-21.
HMRC will give you a refund if your tax bill is less than the amount you owe. If you anticipate a lower tax bill, you can email HMRC and request a change in your account payments.
Time to pay service
Contact the HMRC on their helpline 0300 200 3822, if you do have an unpaid payment or are concerned about missing a potential payment.
To use the time pay service, you need to have an assessment tax bill in the range of £32 to £30,000.
There must also be no unpaid tax returns or other loans or fees owed to HMRC. If you don’t meet these criteria, you might still be qualified for Time to Pay, but you’ll have to contact HMRC directly.
You are also obliged to pay interest on every tax paid late, which will then be added to any outstanding debt.
What if you can’t afford to pay your tax bill?
You may have to pay the tax in interests and penalties if you are late in paying your bill. A chance to pay in installments or more time may be added to you.
On the Gov.UK website, you can determine what to do if you can’t pay your tax bill on time. Tax is a high-priority liability, so if you’re having trouble paying your tax bill, you should contact the Business Payment Support service.