Self-assessment can seem a daunting task, and it might be tempting to leave it to the last minute. But with the 5 October registration deadline fast approaching, now is the time to start getting ready.
Preparing your paperwork early and filing your return as soon as possible means you’ll have less to worry about as the year draws to the close, and no nasty surprises to come back to in January.
If you do run into any problems, we’re on hand to answer your questions and take on as much of the task as you need.
Do I need to file a self-assessment return?
If you’re running your own business, it’s likely you already know you’ll need to file a self-assessment tax return if your income from self-employment was more than £1,000 in the last tax year.
But it also applies to anyone with untaxed income of more than £2,500, whether that’s through renting property, earning tips or commission.
Some other reasons you may need to complete a self-assessment tax return could include:
- earning £10,000 or more from savings or investments
- receiving profits from assets subject to capital gains tax
- being a company director
- receiving dividends of £10,000 or more
- being a higher earner, having income over £50,000 and you or your partner receiving child benefit.
Check HMRC’s guide for more information, or ask us if you’re not sure.
When do I need to register?
If you didn’t send a tax return last year, you’ll need to register for self-assessment by 5 October 2018.
There are different ways to register depending on whether you’re self-employed or a sole trader, not self-employed, or registering for a partner or partnership.
When do I need to file my return?
The deadline for online returns relating to the 2017/18 tax year, and for paying the tax you owe, is midnight on 31 January 2019.
While the majority of people completing self-assessment do so online, around 7% use paper returns instead. The deadline for filing these is earlier, on 31 October 2018.
Which records will I need?
To complete your self-assessment return, you’ll need certain financial records to hand.
If you’re registered as self-employed, this includes:
- all your business expenses
- records of any sales or income
- PAYE records (if applicable)
- VAT records (if registered)
- records of your personal income.
If you’re employed or a company director for a limited company, you may also need:
- P45, P60 and P11D forms
- certificates from a Taxed Award Scheme
- information about any redundancy or termination payments
- information about income and benefits from your job.
What are the penalties for late filing?
If you do miss the deadline, be sure to file your return as soon as possible, as the penalties will increase the longer you leave it.
For filing up to 3 months late, the initial fine is £100. You’ll be charged this even if there’s no tax to pay, or if you pay your tax on time.
After 3 months you could face additional penalties of £10 per day, up to a maximum of £900.
After 6 months, this increases to a further penalty of 5% of the tax due or £300 – whichever is greater.
After 12 months, you’ll be charged another 5% or £300 penalty on top of this.
Talk to us
Filing your tax return can be a complicated process, but it’s important to get it right. We can spare you the stress with our comprehensive self-assessment service.
© 2019 Warr & Co Chartered Accountants. Warr & Co Chartered Accountants is a member of The Institute of Chartered Accountants in England & Wales (ICAEW). Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact any one of the partners on 0161 477 6789 or contact us via our website forms. Warr & Co Chartered Accountants are registered to carry our audit work in the UK, our audit registration number is C002961684, for more information please visit www.auditregister.org.uk.
What if I earn different amounts every month with three different jobs .. how do I calculate my annual income ?
Hi Jennifer,
Not sure if you are self-employed or employed. If you’re employed you would need to look at your payslips to see what your gross income was.
If you’re self-employed it’s important that you detail your total income accurately. It’s not an important factor if the income comes from one, three, or twenty sources – what matters is the total value. So if you have a monthly variable income you must record it correctly by adding up each individual month’s income. This could be done on a simple spreadsheet, that way you can update it monthly and be sure the figures are correct. And if you need to go back historically to note down your monthly earnings, taking a look at your bank records can help. You can then use these figures to work out your tax liability for the year after deducting any expenses.
Looking to the future, you would benefit from adopting online bookkeeping using an MTD-compliant software (find out more about MTD on this link). MTD (Making Tax Digital) is due to go live for Self Assessment in April 2023, after this date you will be legally required to keep digital records on an MTD-compliant software anyway. MTD will be making the whole Self Assessment process simpler too, which will be a most welcome change!
If you’d like help completing your Self Assessment please do reach out to us via our Contact Form here, we’d be happy to help.