What is a self-assessment form?

Key points

• A self-assessment form is crucial for individuals who don't pay tax through the pay as you earn (PAYE) system, enabling them to report various income sources and claim expenses

• Individuals, including the self-employed, partners in business, landlords, and those with foreign income, must determine if they need to file a tax return to avoid penalties

• Registering for a self-assessment tax return is mandatory by the 5th of October in your business's second tax year, with the main deadline for submission being January 31st following the tax year's end

What is a self-assessment form?

A self-assessment form is a document used by HM Revenue and Customs (HMRC) and is aimed at collecting income tax from individuals who are not paying tax through the PAYE system.

The form ensures you pay the correct amount of tax and contribute fairly to public services. It also allows you to report income from various sources and claim allowable expenses, as well as calculate the tax you owe or the rebate you should receive.

Typically, self-employed individuals, freelancers, and those with multiple income streams need to complete a self-assessment form.

Do I need to fill in a tax return?

People required to fill in a self-assessment form include:

• Self-employed earners: As your own boss, a category that includes freelancers and contractors, you must declare your income

• Partners in a business partnership: Being in a partnership requires you to file a tax return for your profit share

• Individuals with an annual income over £100,000: High earners must complete a tax return, regardless of employment status

• Landlords: If you earn rental income, HMRC needs to know via a self-assessment form

• Savers and investors: Those with significant untaxed savings or investment income must declare it

• Individuals with foreign income: If you have income from abroad, especially if domiciled in the UK, you must report it

Not submitting a required tax return can lead to severe penalties. These range from fines to potential legal consequences.

How do I register for a self-assessment tax return?

Registering for a self-assessment tax return is essential to comply with HMRC regulations.

The simplest way to register is online. Visit the HMRC website and follow the links for self-assessment registration. If you don't have a Government Gateway account, you'll need to create one.

Once your account is ready, you can proceed with the registration.

Before starting, ensure you have all necessary documents, including your National Insurance number, personal details, and business or income information.

How to fill in a tax return?

Filling out a self-assessment tax return can seem daunting. However, with the right approach, it becomes straightforward. Here’s how to do it accurately:

1. Gather all necessary documents: Ensure you have all your financial records. This includes your P60, bank statements, and receipts for allowable expenses

2. Access the form: Log in to your HMRC online account to access your self-assessment form. If you haven’t registered yet, do so well before the deadline

3. Fill in your personal details: Enter your name, address, National Insurance number, and other required information

4. Report your income: Fill in sections related to your income carefully. This includes wages, savings, dividends, and any additional income sources

5. Claim allowable deductions: Remember to claim any reliefs or expenses that can reduce your tax bill. This includes charity donations and professional subscriptions

6. Double-check your entries: Errors can lead to delays or investigations. Review your form thoroughly to ensure all numbers add up and the information is accurate

7. Submit before the deadline: Make sure you submit your tax return by the 31st January deadline to avoid penalties

Common mistakes to avoid:

• Forgetting to sign the form

• Missing out on deductible expenses

• Providing incorrect financial details

Tips for accurate and timely submission:

• Start early to give yourself plenty of time to gather information and fill out the form

• Use HMRC’s online tools and calculators for help

• Consider using professional tax advice if your finances are complex

When is the self-assessment tax return deadline?

Every taxpayer should mark important dates to avoid penalties. The main deadline for your self-assessment tax return is January 31st after the tax year ends.

For example, for the tax year ending April 5th, 2023, you must submit by January 31st, 2024.

Missing this deadline incurs a £100 fine if your return is up to three months late. Further charges and interest may accumulate if the delay continues.

To avoid these penalties, consider applying for an extension if you have a valid excuse. This requires contacting HM Revenue and Customs (HMRC) to explain your situation and request more time.