What you need to know about self-assessment tax return

As the 31st January deadline approaches, millions of self-employed individuals – from contractors to freelancers and those with side hustles – are getting their financial records in order and finalising their tax returns. 

While the deadline looms, there’s still time to tackle your tax return if you haven’t made a start yet. 

Here, we cover a few of the essentials to help you file your self-assessment on time and accurately. 

How do I know if I need to submit a tax return?

Anyone receiving income that isn’t taxed at source may have to complete the self-assessment. This includes almost all self-employed workers, as well as some people who are taxed via PAYE.

If that sounds like you, you should be registered for the self-assessment – this means HMRC is expecting your return and can notify you when you need to complete it. 

The registration deadline was 5 October, six months after the end of the 2022/23 tax year. 

I’ve missed the registration deadline…am I in trouble?

If you didn’t register, it’s not too late. 

You might face a penalty for late registration – but this could be waived if you pay your tax bill on time. There’s no need to panic; you still have time to complete the tax return and pay your bill. 

 

 

If I need to submit a tax return…where do I start?

The self-assessment form (the SA100, to HMRC) is a short document, but it asks for a lot of information. 

Once you’ve got it all to hand, though, completing your tax return is a relatively simple, step-by-step process – as our partner, Crunch, explains here.

 

 

SA102, SA103F, SA104S…what are all these other forms about?

These are ‘supplementary pages’ to the main SA100 form, and you’ll only need to fill them in if you’ve got untaxed income from sources not covered there. 

The government website explains who needs to complete which additional forms; limited company directors need to complete SA102, for example, to cover any dividend payments.

Can I include expenses on my tax return?

In a word, yes. Claiming legitimate expenses reduces your overall tax liability, meaning a lower tax bill. 

It goes without saying that you need to be sure that any expense claimed is allowable. A general rule of thumb is that expenses should be wholly and exclusively for business use, and necessary for your business activities. 

However, there are some grey areas, which is why being certain of what you can and can’t claim is vital ahead of the self-assessment. 

Again, you can find out more on the Crunch website. 

What happens if I miss the self-assessment deadline?

There’s a £100 fine straight away, which increases after three months by £10 per day, up to £900 maximum, or £1000 in total – with further penalties at six and twelve months. 

It’s fair to say that this is something you want to avoid at all costs.

Do I also need to pay my bill on 31st January? 

Yes. Most self-employed workers pay taxes ‘on account’, which means you’ll pay a tax bill in two instalments each year. If you’re in this group, one of your payments will be due on 31st January. The other will be due by 31st July.

What happens if I pay my bill late?

Whether you make payments on account or not, it’s important to pay your tax bill on time. Late payments incur a fine – at the time of writing, this is 5% of the tax due. 

This accrues interest, too, with a further 5% payable on top of the total amount owed to date after six months, and a further 5% on top of that after 12 months.

In short, missing the payment deadline can be an expensive mistake.

What happens if I can’t pay my tax bill?

First and foremost, don’t bury your head in the sand. If you can’t pay your tax bill on time, HMRC may agree to a payment plan across a number of months – so pick up the phone to the tax office. 

This is called a ‘time to pay’ arrangement. However, it’s worth pointing out that interest is charged on the outstanding tax given you’re paying it late.

More on ‘time to pay’ here.

I think I’ve made a mistake on my tax return…can I fix it?

Again, don’t panic – you can correct mistakes on your self-assessment. You’ve got up to 12 months after submission to amend any errors – but you should do so as soon as possible if you know any information is incorrect, as inaccuracies can attract the attention of HMRC.

To recap, it’s important to complete your self-assessment accurately and on time. It’s not rocket science, but it can be daunting to complete by yourself – especially if you haven’t done it before.

That’s why we’ve partnered with Crunch, the online accountancy experts for self-employed workers of all kinds. They’ll complete your tax return for you, and as a Qdos customer, you get 35% off.