As a self-employed individual, sole trader, or partner in a business ownership, it’s important you submit a Self-Assessment tax return by the required annual deadline. In doing so, you can ensure that your business steers clear of any substantial penalties and equally, gives you a better understanding of your finances ahead of the future.
We’ve covered all you need to know about filing your Self-Assessment tax return and the key deadlines to keep in mind when planning to do so.
What is a Self-Assessment?
A Self-Assessment tax return is a process by which HM Revenue and Customs (HMRC) reviews and collects income tax.
Once you have met the criteria that makes you responsible for submitting a Self-Assessment, it is your obligation to notify HMRC by completing a tax return online or filling out Form SA100 each relevant year and paying any tax due on your income.
In some cases, you may not be due to pay tax but instead, be eligible for a tax refund if HMRC find that you paid too much that financial year.
What about additional income?
All taxable income must be declared in your Self-Assessment after the end of each tax year (5 April), not forgetting any additional income outside of your normal wages, pensions, and savings.
Additional income that is not from your normal wages or pension may include:
- Money from renting out properties
- Income from savings, dividends, and investments
- Tips and commission-based income
- Foreign income (money made outside of the UK – not subjected to UK tax laws)
Who is eligible to send a tax return?
Self-Assessment is not required for the majority of those who are employed as their income tax is automatically calculated and deducted monthly through PAYE (Pay As You Earn).
A Self-Assessment tax return must be filed if:
- You are Self-Employed or a Sole Trader, and earn more than £1,000 before any deductions (i.e., tax relief from claiming expenses)
- You are a partner in a business partnership
- You have made additional income or capital gains that has not been declared to HMRC
Read more around submitting a tax return under Construction Industry Scheme (CIS) rules.
What is the deadline to file a Self-Assessment and how can I send a tax return?
If you’re filing a Self-Assessment tax return for the first time, you need to register online with HMRC beforehand. You can complete this process here.
The last tax year started on 6 April 2021 and ended on 5 April 2022.
5 October 2022
Midnight 31 October 2022
Midnight 31 January 2023
Midnight 31 January 2023
If a tax return was not filed in the first operating year for those who need to submit a Self-Assessment, they must register by 5 October in the 2nd tax year of their business or being self-employed.
If you do not register in time or your records are found to be inaccurate, incomplete, or illegible, you could face a penalty charge from HMRC.
You are legally required by HMRC to keep all records relating to your Self-Assessment, whether on paper or digitally. Some relevant records include your P60 (PAYE income and tax summary) and/or Self-Employment income and expense receipts.
What are the penalties?
Should you fail to send in your tax return or pay your tax on time, you will have to pay a penalty to HMRC. The amount you will pay depends on the amount of days late your tax return is. If you delay sending your return by:
- 1 day — you’ll have to pay a penalty of £100
- 3 months — you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900)
- 6 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater
- 12 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe
If you delay paying your tax by:
- 30 days — you’ll have to pay 5% of the tax you owe at that date
- 6 months — you’ll have to pay a further penalty of 5% of the tax you owe at that date
- 12 months — you’ll have to pay a further penalty of 5% of the tax you owe at that date
To find out further information on penalties for late filing and late payment and how you can appeal a penalty, you can visit the GOV.UK website.
How can we support you?
Although we are unable to submit your tax return on your behalf, our team of experts are more than happy to offer guidance if you find yourself unsure on what you need to do or have any other queries relating to filing a tax return!
Simply, drop us a message on WhatsApp and one of our friendly team can either help there and then, or give you a call at a time convenient to you!