What Are Self Assessment Tax Returns?

For employees, their income is already worked out by Pay As Your Earn (PAYE) where income tax and national insurance contributions are deducted automatically from wages, pensions and savings. A Self Assessment Tax Return is another way for HMRC to work out how much taxpayers owe should they need to declare any other income, including from their own business, or to claim a tax refund.

If you are self-employed you will need to maintain your own business records including details like payments on account each year. This involves paying six months worth of tax in advance on the 31st of January and 31st of July each year. Then there are expenses to consider claiming on your tax return. Use our tax refund calculator to work out if you could be due a tax refund.

Your Self Assessment Tax Return can be done online or on paper and Taxback can help you complete it.

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Claiming Your UK Tax Refund

Who Needs To Complete A Self Assessment Tax Return?

The self-employed certainly need to do a Self Assessment Tax Returns yet also those who meet the following criteria

You were a company director, unless this was for a non-profit organisation like a charity and you did not receive any income nor benefits such as a company car.

You are a nominated business partner of a Partnership which is registered with HMRC as it is your responsibility to manage the tax returns of your business partnership.

Your income, or that of your partner, was over £50,000 and one of you claimed Child Benefit as the High Income Child Benefit Tax Charges applies.

You received £2,500 or more in untaxed income which can include from renting out a property as well as savings and investments.

Your savings or income from investments was £10,000 or more before tax.

You need to pay Capital Gains Tax as you made profits from selling things like shares, a second home or other chargeable assets.

You received income from abroad and need to pay tax on foreign income.

You lived abroad yet also received a UK income.

You received dividends from shares and you are a higher, or additional rate, taxpayer.

Your income totalled over £100,000.

You were a trustee of a trust or a registered pension scheme.

You had a P800 from HMRC which said you didn’t pay enough tax last year and you failed to pay what you owe through your tax code or a voluntary payment.

You make a substantial amount of money from selling things online.
You are a religious minister or Lloyd’s underwriter.

Why Is It Best To File Your Self Assessment Tax Return Online

To submit your Self Assessment Tax Return online you have to register first on the HMRC website and you will receive an activation code. You will then need a 10-digit Unique Taxpayer Reference Number (UTRN) as well as your National Insurance number or post code. There are deadlines which apply for filing which should not be missed as there are penalties if you are even a single day late in submitting. In the 2019/2020 tax year, the deadline for registering for Self Assessment is 5th October 2020, for paper tax returns it is midnight on 31st October 2020, for online tax returns and paying the tax you owe it is midnight on 31st January 2021. 

Once you have filed your tax return you should receive an automatic acknowledgement from HMRC though if you are sending a paper return you will need to provide proof of postage in case it is delayed. 

What If I Cannot File An Online Self Assessment Tax Return?

To submit your Self Assessment Tax Return online you have to register first on the HMRC website and you will receive an activation code. You will then need a 10-digit Unique Taxpayer Reference Number (UTRN) as well as your National Insurance number or post code. There are deadlines which apply for filing which should not be missed as there are penalties if you are even a single day late in submitting. In the 2019/2020 tax year, the deadline for registering for Self Assessment is 5th October 2020, for paper tax returns it is midnight on 31st October 2020, for online tax returns and paying the tax you owe it is midnight on 31st January 2021.

Once you have filed your tax return you should receive an automatic acknowledgement from HMRC though if you are sending a paper return you will need to provide proof of postage in case it is delayed.

What Do I Need To Know About Self Assessment Tax Returns?

To submit your Self Assessment Tax Return online you have to register first on the HMRC website and you will receive an activation code. You will then need a 10-digit Unique Taxpayer Reference Number (UTRN) as well as your National Insurance number or post code. There are deadlines which apply for filing which should not be missed as there are penalties if you are even a single day late in submitting. In the 2019/2020 tax year, the deadline for registering for Self Assessment is 5th October 2020, for paper tax returns it is midnight on 31st October 2020, for online tax returns and paying the tax you owe it is midnight on 31st January 2021.

Once you have filed your tax return you should receive an automatic acknowledgement from HMRC though if you are sending a paper return you will need to provide proof of postage in case it is delayed.

 

What If I Cannot File An Online Self Assessment Tax Return?

Not everyone readily has access to the internet and disabilities can prove challenging to completing a tax return online. Certain MOD personnel are also required to submit their tax return on paper due to their clearance level. If you have any difficulty submitting an online tax return, Taxback can talk you through it.

Self Employed Self Assessment

For the self-employed, understanding self assessment is crucial as the system has specific requirements and deadlines with penalties should they be missed. Taxback are here for any questions you may have and can even file your tax returns for you.

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What Paperwork Is Required For A Self Assessment Tax Return?

  1. Your P45 if you stopped working for an employer during the tax year.
  2. Your P60 to show what tax you have already paid.
  3. Your P11D should you receive any benefits in kind such as a company car.
  4. Records of any Taxed Award Schemes or redundancy payments.
  5. Evidence of extra income including incentive payments or benefits such as meal vouchers.

 

What Are The Penalties If I Fail to Submit My Self Assessment Tax Return?

  1. A £100 automatic fine for late filing.
  2. £900 in accumulative fines over the following three months.
  3. A £3,000 fine for each year you fail to provide the necessary tax records
  4. If you are worried you may get fined, talk to Taxback and we can take the pressure off.

 

Our London based UK tax accounting team are available online and during the following hours

You can reach us on the phone on +44 (0) 208 834 1326 from Monday to Friday: 9am – 5.30pm
You can email us whenever at info@taxback.co.uk

What Is Employment Status?

Your employment status determines your National Insurance contributions, your Income Tax, how you pay both and how you qualify for, then claim, your tax returns. As such, those who are self-employed and those who are employed and pay their tax via PAYE are treated differently.

You should know if you are employed if you work set hours, receive regular pay which is taxed, paid holidays and have a contract and work for a company you do not own. The self-employed tend to work for several clients at the same time, may own their own business and are free to choose how, where and when they work. They also provide invoices as a means to get paid from each job they complete and pay their own taxes through Self Assessment. Avoid declaring yourself as self-employed if you are treated as an employee as you will fail to benefit from sick pay or maternity leave.

What Are My Self Employed Allowable Expenses?

These are the essential costs for you to work as self-employed and reduce the amount of profit you end up paying tax on when you file your Self Assessment Tax Return.

These costs include;
– Travel costs which can be in your own vehicle or by public transport.
– Specialised clothing, tools or equipment that are required for your work.
– Advertising or marketing.
– Any stock you buy to sell on.

There are also allowances for items that have a business and personal use such as a phone bill or laptop. However, you can only claim for the proportion of business use you get out of it so if you use your laptop half the time for your business then you can only claim for half of the cost.

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How Do I Work Out My Allowable Expenses?

Though it may seem confusing to work out your allowable expenses, it should not be. Consider HMRC’s own ‘simplified expenses’ rules where you can claim fixed amounts as expenses for things like working from home or running your own vehicle which only sole traders and partnerships can use.

Getting your tax back

How Long Does A Self Assessment Tax Return Take To Process?

HMRC usually takes about eight to ten weeks to process a tax refund. The main consideration should be how long it takes to complete the tax return itself and Taxback can help you along the way to ensure you are registered and getting that return filed.

Contact Taxback if you want to know about a UK Tax Refund.

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Read our online guides or talk to our UK Tax agents to find out what expenses or refunds you could claim.



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