Everything you need to know about your Self Assessment Tax return.
Who needs to do one?
If you’re self-employed, a contractor or someone who doesn’t get their tax deducted through PAYE (Pay As You Go) scheme then you will have to do a self-assessment tax return.
What is a self-assessment?
Normally if your an employee and get paid you will automatically pay your tax through the PAYE scheme, along with your national insurance contributions and vat.
But if not then the tax man needs to work out how much tax someone needs to pay, and to do that a self-assessment needs to be done to ensure that the correct amount of tax is paid.
When to do the self-assessment?
Before you even start you will need to register online.
You should have your UTR (unique taxpayer reference) this can be found on the registration letter that the HMRC would have sent out to you then you will need to create a Government Gateway Account, then activate the service using your unique code that will be sent out to you in the post, this can take a while so don’t leave this to the last week of the deadline.
Over the course of the tax year, you should have kept ALL your incomings and outings and have records of everything. To keep the task of filling out your self-assessment less stressful it may be a good idea to keep on top of your accounts over the course of the year.
When to send in your tax return?
HMRC are very strict on the tax return deadline and penalties WILL be incurred so make sure that you send in your tax return by the 31st January for online submissions but if sending your tax return via post then do this a lot sooner.
Penalties for late tax returns.
The minimum fine is an initial £100, then a £10 penalty is added on top of that on a daily basis up to £900 being the maximum, if after 6 months you haven’t paid up then a further £300 is added onto the increasing bill, and they keep adding on after a further 6 months still.
Appealing against a penalty.
If you have been penalized for a late tax return, but feel it done so unfairly then you can appeal.
In unique circumstances, a penalty may be over ruled, for example, if you were suddenly taken ill and have rushed to the hospital, or you have suffered the death of a partner or close relative, a technical failure that was out of your control which resulted in you not being able to access your data. All of these will have to be proven though. However, the dog eating it won’t simply forgetting won’t get the penalty overturned.
A few pointers to remember.
The tax man is very frankly and wants all the paperwork on time, so don’t be late. And remember, if posting your return tax return this needs to done even sooner.
Get organised you have a whole year to keep on top of the paperwork, no point running around like a headless chicken on the 21st January.
Get an accountant to help, they can save you an unnecessary headache and may even be able to save you a few quid.
Don’t forget paperclips are deductible, as is the paper for the printer and if you work from home then you could get a little off the electricity and phone bill but I don’t think the sky movie package will make the grain. You never know, you may be entitled to a refund, so you can call the tax refund number.