What is Self-Assessment?
Self-Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.
Tax is usually deducted automatically from wages, pensions, and savings. People and businesses with other income must report it in a tax return.
Who must send a tax return?
You must send a tax return if, in the last tax year (6 April to 5 April), you were:
- self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- a partner in a business partnership
You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:
- some COVID-19 grant or support payments
- money from renting out a property
- tips and commission
- income from savings, investments and dividends
- foreign income
Registering and sending a return
You need to register if you did not send a tax return last year. There are different ways to register if you’re:
- self-employed or a sole trader
- not self-employed
- registering a partner or partnership
If you’re new to Self-Assessment, you’ll need to keep records (for example bank statements or receipts) so you can fill in your tax return correctly.
Deadlines
HM Revenue and Customs (HMRC) must receive your tax return and any money you owe by the deadline.
Registration Deadline: 05 October
Paper Tax Return: Midnight 31 October
Online Tax Return: Midnight 31 January
Penalties
You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill.
You’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late.
You’ll be charged interest on late payments.
For more information on how we can help you and your business with your taxation needs or to appoint us as your accountant, please call 02035531059 / 07950585521 or email info@citygateaccountants.co.uk