A self-assessment tax return in the UK is a form that individuals use to report their income, capital gains, and other relevant information to HM Revenue and Customs (HMRC). The self-assessment system is used to calculate and pay the amount of tax owed by taxpayers who are not taxed through the PAYE (Pay as You Earn) system, such as self-employed individuals, company directors, landlords, and those with other incomes.
Self-assessment tax returns are typically filed annually, covering the tax year which starts from 6th April to 5th April of the following year. The tax return provides a comprehensive picture of an individual’s financial affairs and helps HMRC determine the amount of tax owed or any refunds due.
Who needs to file Self Assessment tax returns?
If any of the following applied to you in the last tax year (from 6 April to 5 April), you are required to submit a tax return:
- You worked as a sole trader and earned over £1,000 before deducting any eligible tax relief.
- You were a partner in a business partnership.
- Your total earnings amounted to £100,000 or more.
In addition to the previously mentioned circumstances, individuals in the UK may also be required to file a tax return if they have any untaxed income. This can include receiving COVID-19 grants or support payments, earning rental income from a property, receiving tips and commission, generating income from savings, investments, and dividends, or having foreign income.
How to Register for Self Assessment ?
To register for self-assessment in the UK, follow these steps:
1. Obtain your Unique Taxpayer Reference (UTR): If you don’t already have a UTR, you will need to apply for one. You can do this online on the HMRC website or by calling the HMRC helpline.
2. Visit the HMRC website: Go to the HMRC website and navigate to the “Self Assessment” section. You can find this under the “Tax” category.
3. Create a Government Gateway account: If you don’t have one, you will need to create a Government Gateway account. This will allow you to access HMRC’s online services.
4. Enrol for self-assessment: Once you have a Government Gateway account, you can enrol for self-assessment. You will be asked to provide your personal information, including your UTR.
5. Await activation PIN: After enrolling, HMRC will send you an activation PIN by post. This can take up to 10 working days.
6. Activate your account: Once you receive the activation PIN, log in to your Government Gateway account and enter the PIN to activate your self-assessment account.
7. Complete the registration: Once your account is activated, you will need to provide additional information, such as your National Insurance number and contact details, to complete the registration process.
After completing these steps, you will be registered for self-assessment. HMRC will send you a Unique Taxpayer Reference (UTR) and a notice to file a tax return when it’s time to submit your tax return for the relevant tax year. Remember to keep track of important deadlines and ensure timely submission of your tax return to avoid penalties.
What is the deadline for filing Self Assessment tax returns?
The deadlines for self-assessment tax returns in the UK depend on the method of submission. Here are the key deadlines to keep in mind:
Paper Filing: If you choose to submit a paper tax return, the deadline for filing is usually 31st October following the end of the tax year. For example, for the tax year ending on 5th April 2023, the paper filing deadline would be 31st October 2023.
Online Filing: If you choose to file your tax return online, the deadline for submission is extended to 31st January of the following year. Using the same example, for the tax year ending on 5th April 2023, the online filing deadline would be 31st January 2024.
What is the Deadline for Payment of Self Assessment Tax Due?
Regardless of the filing method, any tax owed must be paid by 31st January following the end of the tax year. This includes any outstanding tax liabilities for the previous tax year as well.
What are the penalties for late filing of Self Assessment tax returns?
Failing to submit your Self Assessment tax return by the deadline can result in penalties and additional charges. Here are the penalties for late filing of Self Assessment tax returns in the UK:
| 1 day | Penalty of £100 |
| 3 months | Additional penalty of £10 a day, for a maximum of 90 days (£900) |
| 6 months | Further penalty of 5% of the tax you owe or £300, whichever is greater |
| 12 months | Further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe |
What are the penalties for late payment of tax?
If you delay paying your tax by:
| 30 days | you’ll have to pay 5% of the tax you owe at that date |
| 6 months | you’ll have to pay a further penalty of 5% of the tax you owe at that date |
| 12 months | you’ll have to pay a further penalty of 5% of the tax you owe at that date |
Summary
Self-assessment tax returns can seem daunting, but with a clear understanding of the process, you can navigate them successfully. Remember, self-assessment tax returns are a legal requirement, and accurate reporting is essential.
It is crucial to meet the deadlines and provide accurate information to comply with HMRC regulations. Consider seeking assistance from an accountant or tax professional for complex tax situations or if you require guidance throughout the filing process.
