The build-up to filing a self-assessment tax return can be a bit daunting at first, especially if it’s your first time having to fill one out.
Keeping HMRC paid and satisfied is the easiest way to make sure your working life goes a little smoother, so getting it right the first time and continuing to do so is essential.
If this is all new to you, this post will lead you through the essential process of completing a self-assessment tax return.
Do I need to file a self-assessment return?
You’ll need to complete a self-assessment tax return if you’re self-employed and have an income of more than £1,000. Not only does this apply for contracted work, but also if you rent out a property and your income is more than £2,500 a year.
If your rented property income is between £1,000 and £2,500, you’ll need to contact HMRC and fill out a self-assessment form.
You’ll also be required to submit a self-assessment tax return if you’re a company director. Other times you’ll need to file one are:
- you’ve earned £100,000 or more
- had savings or investment income of more than £10,000 before tax
- received income from abroad
- earned more than £50,000 and claimed child benefit.
It’s not just important to pay the right amount of tax but to pay it by the strict HMRC deadlines. Failure to do so can incur penalties of £100. Any further delay will lead to interest payments up to a maximum of £900.
For the tax year 2022/23, you have to meet these deadlines:
- 5 October 2022 – register for self-assessment if you’re self-employed or a sole trader, not self-employed or registering a partner or partnership
- midnight, 31 October – paper tax return filing
- midnight, 31 January 2023 – online tax returns
- midnight, 31 January 2023 – pay any outstanding tax
Each year, thousands of taxpayers leave it until the last minute to submit their tax returns, meaning some may miss the deadline or make mistakes on their paperwork. There are many benefits to starting your self-assessment early, so Leap recommends that you get an early start on it.
What to include
To fill out and complete your self-assessment tax return, you’ll need your National Insurance number and your 10-digit unique taxpayer reference (which you’ll receive once you’ve registered).
You’ll also need a P60 from your employer (if you have one), showing your income and the tax you’ve already paid.
Similarly, you’ll need a P45 if you’ve left a job in the current tax year and a P11D and P9D, which shows any benefits and expenses you’ve received.
To claim back any expenses you’ve accrued throughout the year, you’ll need to have kept your receipts, statements and accounts. While you won’t need to send off physical copies of your receipts, you’ll need them if HMRC has any queries.
If you’ve made contributions to a pension scheme, this will need to be included, as well as any charitable donations, child benefits or state pension payments.
In your self-assessment, you will also need to include any rental income or expenses if you’re a landlord. The same will apply if you have any income from investments.
You may also have to announce any interest that’s been made payable on any of your savings, depending on how much you’ve earned. You can have up to £5,000 of interest paid on your savings before paying tax.
Any capital gains made over the year must be declared to HMRC. For example, if you’ve sold your home, you’ll need to consider your capital gains allowance and pay any due tax.
How to pay your taxes
There are a few ways to pay your outstanding taxes. One of the easiest ways is to do it via the Government website with a credit or debit card.
You can also do it through online or telephone banking, or if you’d rather do it in person, you can make payments at your bank or building society.
Get in touch
If you need help filling out your self-assessment tax returns, or have any questions about sending them off to HMRC, the team at Leap Accountants is on hand to help.