The deadline for tax return is fast approaching. To make it as stress-free as possible, we have created this handy guide on how to file your self-assessment tax return accurately and on time. For business owners, sole traders, and self-employed individuals in the UK, this process can feel overwhelming—especially if your income sources are diverse or your earnings fall into higher tax brackets.
This guide breaks down everything you need to know about filing your self-assessment tax return, so you can avoid costly mistakes and take advantage of potential savings.
What's the guide?
- What Is a Self-Assessment Tax Return?
- Who Needs To File A Tax Return
- Key Deadlines That You Need to Remember
- Who Is Required to File a Self-Assessment Tax Return?
- What Information Do You Need to Prepare for a Tax Return?
- Understanding Allowable Expenses and Tax Reliefs
- The Step-by-Step Process to File a Self-Assessment Tax Return Online
- Common Mistakes to Avoid When Filing Your Tax Return
- What Happens If You Miss the Self Assessment Filing Deadline?
- Key Benefits of Hiring an Accountant for Your Tax Return
- How KPPCA Can Help Simplify Your Tax Return Process
What Is a Self-Assessment Tax Return?
A self-assessment tax return is a method used by HMRC (Her Majesty’s Revenue and Customs) to collect income tax from individuals whose tax obligations are not automatically deducted. Unlike salaried employees, who typically pay taxes through PAYE (Pay As You Earn), individuals with self-employment income, rental income, or other non-PAYE income sources must report their earnings and expenses through a self-assessment tax return.
Who Needs To File A Tax Return
You need to file a self-assessment tax return if you:
- Are self-employed as a sole trader earning more than £1,000 annually.
- Are a partner in a business partnership.
- Receive rental income, dividends, or foreign income.
- Have untaxed income exceeding £2,500.
- you have total taxable income of £150,000 or more before tax (up to 2022/23, this
threshold was £100,000) - you need to pay the high income child benefit charge
Key Deadlines That You Need to Remember
Mark these dates in your calendar:
- 5th October: Deadline to register for self-assessment.
- 31st October: Deadline for paper tax returns.
- 31st January: Deadline for online tax returns and paying owed tax.
Failing to meet these deadlines could result in late filing penalties, so timely preparation is crucial.
Who Is Required to File a Self-Assessment Tax Return?
Not everyone is obligated to file a self-assessment tax return. However, the following groups typically need to:
- Business Owners: Those running a sole proprietorship or a partnership.
- Sole Traders and Self-Employed Individuals: Including freelancers, contractors, and gig economy workers.
- Landlords: If you receive rental income from properties.
- High Earners: Individuals earning over £100,000 annually or with complex income sources.
If you’re unsure whether you need to file,contact us today and we can help you to access your tax obligations.
What Information Do You Need to Prepare for a Tax Return?
Preparation is key to ensuring your tax return is accurate and compliant. Gather the following documents and details:
Income Records
- Invoices for all business earnings.
- Bank statements for additional sources of income, such as rental payments or dividends.
Expense Records
- Receipts for business-related expenses, such as travel, equipment, or subscriptions.
- Records of allowable expenses to maximise tax relief.
Other Documentation
- Your 10-digit unique taxpayer reference (UTR) number.
- Your National Insurance Number
Keeping these records organised throughout the year will make filing much easier.
Understanding Allowable Expenses and Tax Reliefs
Allowable expenses are costs incurred during the running of your business that can be deducted from your taxable income. This reduces your overall tax liability.
What Qualifies as an Allowable Expense?
- Office Costs: Rent, utilities, and office supplies.
- Travel Costs: Mileage, parking, and public transportation.
- Equipment and Technology: Laptops, tools, and software subscriptions.
Understanding and correctly claiming allowable expenses can lead to substantial savings on your tax bill. If you have complex income sources, it’s highly advisable to seek assistance from a professional accountant. Their expertise can help you identify and claim tax reliefs that you might otherwise overlook, ensuring you maximise your savings and stay fully compliant with HMRC regulations.
The Step-by-Step Process to File a Self-Assessment Tax Return Online
Filing your tax return online is the most efficient method. Here’s a step-by-step guide:
- Register for Self-Assessment
If this is your first time, you’ll need to register with HMRC to receive your unique taxpayer reference (UTR). - Log in to Your HMRC Account
Use your government gateway credentials to access your online tax account. - Fill Out the Tax Return Form
Fill in the main tax return form (SA100) and the supplementary pages. Complete each section, including income, expenses, and any tax relief claims. - Review and Submit
Double-check your entries to avoid errors and submit before the 31st January deadline. - Pay Any Taxes Owed
Make your payment using the methods provided by HMRC.
Common Mistakes to Avoid When Filing Your Tax Return
Avoid these errors to prevent delays, penalties, or overpayments:
- Missing Deadlines: This can result in fines starting at £100.
- Incorrectly Reporting Income: Misreporting can trigger audits or penalties.
- Failing to Claim Expenses: You could miss out on significant tax savings.
Make sure you double-check your entries or choose to work with a professional to eliminate these risks.
What Happens If You Miss the Self Assessment Filing Deadline?
Missing the self-assessment deadline can lead to:
- A £100 penalty if your tax return is up to 3 months late, even if no tax is owed.
- Daily penalties and interest for unpaid taxes.
- Stress and potential scrutiny from HMRC.
If you’re late, filing as soon as possible minimises additional charges. KPPCA offers emergency tax filing assistance to help you catch up.
Key Benefits of Hiring an Accountant for Your Tax Return
Hiring an accountant can be a game-changer for business owners, sole traders, and self-employed individuals with complex finances. Here’s why:
- Save Time and Reduce Stress: Let a professional handle the details so you can focus on your business.
- Maximise Tax Efficiency: Accountants know the ins and outs of allowable expenses and tax reliefs.
- Avoid Costly Errors: A qualified accountant ensures your returns are accurate and compliant.
How KPPCA Can Help Simplify Your Tax Return Process
At KPPCA, we specialise in helping business owners and self-employed professionals navigate the complexities of self-assessment tax returns. Our services include:
- Personalised tax advice for Scotland-based businesses.
- Detailed bookkeeping and expense management.
- Expert support to maximise your tax savings
Don’t let tax season overwhelm you. KPPCA’s team of experienced accountants is here to ensure your tax return is accurate, timely, and optimised for savings.
Contact us today to get started and take the stress out of tax return filing!
