What is it?
Self Assessment is one of the systems that HM Revenue & Customs (HMRC) use to collect tax from individuals.
It includes the annual tax return that people with more complex tax affairs must complete and submit to HMRC by the deadline alongside any tax they owe.
For the last 25 years or so it has been the responsibility of the individual to identify whether they owe tax, hence ‘self assessment’.
Do I need to complete a tax return?
Whilst there are several reasons why HMRC might want a tax return from you, some of the more common include:
Being self employed or a company director.
Renting property.
Having a household income above £50,000 and claiming Child Benefit.
Earning untaxed income.
Having taxable savings and investment income or selling certain investments at a profit.
Being a high earner with income over £100,000.
What are the important dates?
The UK tax year runs from 6 April to 5 April each year. Shortly after the 5 April HMRC will issue your tax return or a notice to complete a tax return for the year.
There are two submission dates depending on how you file your tax return. Paper tax returns must be filed by 31 October following the end of the tax year, whilst online returns must be submitted by 31 January.
If you think you owe tax and are not registered for Self Assessment, you must register by 5 October following the end of the tax year.
What about settling up?
Any tax owed must be paid by 31 January following the end of the tax year.
In certain cases, you may also be required to make ‘payments on account’. These are advance payments towards your tax bill for the following tax year.
What if I miss a deadline?
It is important to make sure you register, file and pay on time as HMRC can charge penalties if any of the deadline dates are missed.
Penalties can be fixed, such as the £100 charged if you are a day late in filing your tax return, or a percentage of the tax owed to HMRC. The amount of penalty increases the greater the delay between the deadline date and the date on which you file your tax return or pay the tax owed.
HMRC also charge late payment interest on tax owed.
How can we help?
At Fairfields Tax we can deal with your registration for Self Assessment, expertly prepare your tax return, calculate what tax you might owe and advise on the appropriate tax payments to make.
Please do contact us for a free, no obligation quote for help with your tax return.
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