When is a Self Assessment Tax Return Required?
Who Needs to File a Self Assessment Tax Return?
Navigating the requirements of a Self Assessment tax return can feel overwhelming, particularly if you’re new to being self-employed, a sole trader or generating multiple streams of income.
In this article, we’ll help you understand when a self assessment tax return is required, explain self assessment for self employed individuals, and provide guidance on how to fill out a self assessment tax return, so you can approach the process with confidence.
What is a Self Assessment Tax Return?
Self Assessment is a system used by HMRC to collect income tax. It applies when individuals or businesses have earned income that hasn’t already been taxed or reported to HMRC.
Not everyone in the UK is required to complete a Self Assessment tax return. Many taxpayers have their taxes deducted through PAYE (Pay As You Earn). However, if you earn more than £100,000, you may still find yourself subject to the requirements of submitting a tax return.
Do I Need to File a Self Assessment Tax Return?
In most cases, HMRC will send a “notice to file” to individuals required to submit a Self Assessment tax return.
If you’re currently wondering, “Do I need to file a Self Assessment tax return?” here’s some clarity. Various circumstances may have triggered a request, including:
- Self Employment: If you are self-employed or operate as a sole trader, you will likely receive a letter from HMRC asking you to submit a Self Assessment tax return. This allows you to declare your self-employed income and expenses.
- Additional Income: If you have additional income beyond your primary employment, for example from renting out a property or conducting freelance work.
- High Income Child Benefit Charge: If you or your partner receives Child Benefit and one of you has an income above £60,000, you may need to complete a Self Assessment tax return to pay the High Income Child Benefit Charge.
Additional circumstances include income derived from tips and commissions, savings, investments, dividends and foreign sources.
How to Fill Out a Self Assessment Tax Return
If this is your first time submitting a Self Assessment tax return, you’ll need to begin by registering for Self Assessment. Once registered, you’ll receive your Unique Taxpayer Reference (UTR).
To file your return online, you’ll also need to set up a Government Gateway account. Instructions on how to do this will be included in the letter confirming your UTR.
Before you begin filing your tax return, be sure to have these documents on hand:
- Your 10-digit UTR: This unique 10-digit code can be found on any letters from HMRC, such as your Notice to Complete a Tax Return.
- Your NI Number: This can be found on any payslips or P60s from previous or current employers.
- Your Government Gateway User ID: This 12-digit User ID is generated when you register for Self Assessment.
- Invoices: If you’re operating as a sole trader or partner in a partnership or LLP, you’ll need to add up all your invoices to calculate your income for the tax year.
- Expense Receipts: If you’re a sole trader or in partnership, you can claim for business expenses, such as petrol and travel costs.
- Student Loan Repayments: You’ll need to know what plan you’re on and how much you’ve repaid in the tax year.
- P60: If you were paid by another employer, you’ll need to know how much you received, how much was taxed and the employer’s PAYE tax reference. This can all be found on your P60.
- P11D Form: If you received any benefits from your employer in addition to your salary, you’ll need to declare these figures. They can be found on your P11D form.
- Bank Interest: Any interest received from bank accounts will need to be declared. If your account is shared, you’re only required to declare half of the interest.
- Pensions: If you have received any payments, you’ll need to declare your income from the State Pension and any private pensions.
- Dividends: Limited company directors declaring dividends in the tax year must include these details. In addition, you must declare dividends received from companies outside the UK, or from companies not your own.
- Income From Trusts: If you don’t already have this information, reach out to the trustee managing the trust for a summary.
- Income From Rented Properties: If you’re a landlord, compile details of the income received from renting your property.
Once you’ve provided all the relevant details, HMRC will calculate how much you owe.
How to Amend Your Self Assessment Tax Return
Amending your Self Assessment tax return is possible, as long as you do so before the amendment date.
If HMRC requested your return before the 31st of October following the end of the tax year, the amendment deadline will be the 31st of January following the end of the tax year. If the notice came after the 31st of October, the amendment deadline is 15 months from the date of that notice.
If you filed your original tax electronically, you can make the amendment electronically through HMRC’s Self Assessment portal.
Choose our Self Assessment Tax Return Services
At Hartley Fowler, our mission is to remove the stress that often comes with the approaching Self Assessment deadline. Beyond completing your return, we provide expert advice on your tax liabilities, support you in liaising with HMRC, and handle all correspondence, saving you valuable time and effort.
If you’re unsure when a self assessment tax return is required, or want to learn more about self assessment for self employed, call us today to arrange a free consultation.
Wimbledon office: 020 8946 1212