Filling in your tax return can seem daunting, especially if you haven’t completed one before. With the Self-Assessment tax return deadline looming, we’ve outlined five things you need to know about the all-important tax return to ensure you’re paying correctly and on time.
1. What is Self-Assessment?
So, you need to report your taxable income via the Self-Assessment tax return. The good news is, you’re in the right place.
Self-Assessment, reported to HMRC, allows you to declare your taxable income for the year and pay your income tax bill.
Those who are employed have tax deducted monthly through their payslips, but for the self-employed folks, taxable income must be declared for the Year Ended 5 April 2023 by the 31 January 2024 deadline and reported through the Self-Assessment tax return.
2. Who needs to fill out a tax return?
Self-Assessment isn’t just for the self-employed. You will need to fill out the tax return if you are:
- Employed with a buy-to-let property
- Employed and have made profit from a the sale of a second home
- Employed with a side hustle / additional income – eBay & Etsy sellers etc (with effect from 01.01.24)
- Employed and have made money from savings, investments or dividends
If you’re unsure on whether you’re required to fill out a Self-Assessment tax return, you can use this free tool.
3. Key dates to remember
- 5 April – start of the tax year
- 6 April – beginning of the tax year
- 31 January – file your tax return and pay your tax bill
- 5 October – deadline to register for Self-Assessment
- 31 October – deadline for paper tax returns
When the tax year ends, you must file your tax return and pay any tax owed by the following January.
E.g. the 2022-23 tax year ended on 5 April 2023 but 31 January 2024 is the tax return deadline for paying the money you owe.
Important: penalties and surcharges for late filing and late payment of tax returns apply.
Up to 3 months late: £100 automatic penalty
3-6 months late: A daily fee of £10 for up to 90 days
6-12 months late: 5% of tax due or £300 – whichever is higher – on top of previous penalties
12+ months late: A further 5% or £300 penalty – HMRC may also fine you 100% of the tax due.
5% or 10% surcharge apply for underpayments on account.
4. Filling in your tax return
Now for the important bit.
If you choose to complete your Self-Assessment yourself, you’ll firstly need your unique taxpayer reference number. You’ll then need to make your way through the system, completing sections on your income from the relevant tax year.
Having an accountant to fill out your Self-Assessment can be hugely beneficial. An experienced accountant will have filled out hundreds – if not thousands – of tax returns in their time, so they know their way around the system and are less likely to make mistakes.
Accountants can find deductions, so your tax bill can be reduced legally. You can also benefit from expert advice and help with organising your files to make next year’s return less painful.
Arguably the most convenient thing – you don’t have to fill it out yourself and can get on with running your business.
5. Paying your tax bill
The deadlines for paying your tax bill are:
- 31 January – tax you owe from the previous year (a balancing payment) and your first payment on account
- 31 July – your second payment on account (if the total liability is over £1,000).
You can pay via direct debit, online or telephone banking, debit or credit card online, at your bank or building society or by BACS. Please note, cheques are no longer accepted.
If you have any questions about the Self-Assessment, or would like to have an informal chat with a member of our team, please contact us.