How do I complete my self assessment tax return?
The HMRC website is not the very simplest of its kind, but if you sit down to it and follow it through it will tell you almost everything you need to know about self assessment and tax in general. The main thing to remember about the self assessment tax return is the deadlines – October 31 for paper, January 31 for online. There is a fine for late filing, which is not huge at £100 but worth avoiding nevertheless. If you are only self employed and not in receipt of other income, the self assessment tax return is really very simple to complete.
To file on paper, you need to have a tax return form, which you can get from the tax office or you can download it online. Like the online version it leads you through very clearly from page to page and you will find that there are probably several pages which don’t even have to concern you. This is where filing online is much easier than on paper, because by pressing the ‘next’ button, you automatically move on. If you plan to file online, you will need a Government Gateway number, which you can apply for online, but you need to allow some time for the card with the number on to arrive. Without the number, you can’t log in, even if you have your Unique Tax Reference and you National Insurance Number to hand. This has taken many a self employed person by surprise in their first year of trading but once the system is in place, it goes on from year to year without needing to be changed.
You can file any time after the end of the tax year (5 April) but in practice most people wait until nearer the deadline. If your self employed work is quite simple, with no outstanding invoices at the end of the year and with all expenses disbursed, you might just as well file earlier, as it is one less thing to have to do later. If your turnover is relatively small – the figure changes year by year, so you should check regularly – then you won’t need to supply every tiny detail of your expenses and income on the return. This is called the Short Return and is basically a rolled up figure of everything in against everything out. The online version then calculates your tax liability for you and you can pay a number of ways, including online.
You don’t have to be an accounting genius to file a tax return but possibly you might like your accountant to do it for you, assuming you have one. There is a box he will fill in to say he is doing it on your behalf, but it is still your responsibility to make sure that all the figures are an accurate representation of your earnings and outgoings. If your part time business is quite small and simple, with no employees or large borrowings or other complex financial issues, then it is certainly not necessary to hire an accountant just to do your self assessment tax return. Everyone is used to online forms, especially government ones, being complex and unhelpful but despite the bad press the Tax Office has had in recent years, the self assessment tax form is actually genuinely easy to use.