How to complete a self assessment tax return

For those who are planning to file their self assessment tax forms online the deadline is 31 January each year. Here are some tips to help you.

Self Assessment Tax Return


Fine for late tax return filing

There is a fine for late filing, which is not huge at £100 for the first three months past the deadline, 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.

Filing your tax return on paper

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.

Filing online

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.

When to file your self assessment tax return

You can file any time after the end of the tax year in 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.

You don’t have to be an accounting genius to file a tax return, but you might like your accountant to do it for you, assuming you have one. There is a box he or she will fill in to say they are 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.

Making Tax Digital

Over the next few years the Government intends to move away from the self-assessment form. Making Tax Digital is the government’s flagship proposal to fully digitise tax by 2020 and effectively put an end to the traditional tax return by getting business owners to update HMRC quarterly about their tax. The plans are currently in consultation with an update expected in the coming weeks while the roll-out of the new legislation is likely to begin in the next year or two.

Which? magazine has just launched its own free HMRC-recognised online tax calculator so you can calculate how much you owe. For a small additional fee you can also file your self-assessment form straight to HMRC.

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