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Self Assessment Tax Return Accountant

What is a self-assessment tax return?

A self-assessment tax return is a form you or your accountant must complete if you receive income outside of formal employment. It is to declare your annual earnings and calculate the amount of tax you owe. Completing a tax return does not necessarily mean you will have to pay tax; in some circumstances, it could actually result in tax savings. HMRC sends you your tax return to your business’ registered office or informs you that you must complete a tax return online.

A personal tax return takes many factors into consideration to calculate your tax bill, so it pays to be prepared with evidence of all your business income and work expenses. There are tax implications with all manner of money sources and outgoings, and it all goes on your self-assessment tax return. Accountants can be very helpful when you have a complicated situation, to make your job hassle-free.

Do I need to file a self-assessment tax return?

Tax returns must be completed by anyone trading, who is self-employed, whether as a sole trader or as part of a limited company. There are other circumstances that place a legal obligation upon you to complete a tax return, such as:

  • You have substantial work expenses: If you spend more than £2,500 on business expenses in a single tax year, you are entitled to tax savings by completing a tax return. For example, if you use your personal vehicle for business and your overall mileage claim exceeds £2,500, you will need to complete your tax return to claim mileage tax claims.
  • You’re a UK landlord: If you have rental income from a property you own, you will need to submit annual tax returns to declare that price. This must be done regardless of whether you make a profit or a loss.
  • You’re a non-resident UK taxpayer: If you have a UK-based income and are required to pay tax, you must complete yearly self-assessment tax returns to declare it.
  • UK non-resident landlord: Most non-resident individuals who have rental income from UK property will have to declare it on a UK tax return. If you have already paid tax on your earnings, you may be entitled to a rebate.

How self-assessment tax returns work

When you or your accountant files your tax return online or on paper, you only need to fill out the sections that are relevant to you. Most individuals will only need to complete the SA100 form, but there are some supplementary pages that could apply to some individuals.

The online tax return, once completed, automatically calculates your tax bill on the basis of the information you submit. For this reason, it is essential to ensure all the information you or your accountant enters is accurate. When you use the paper version, it will be sent to your business’ registered office for receipt. Accuracy is equally important because, once HMRC receives it, they will calculate your tax liability and send you a bill.

The more sections of the form are relevant to you, the more complicated the filing can get. This includes areas such as submitting supporting documents for your income and any other information you submit. For this reason, many self-employed individuals choose to contact an accounting firm and have a tax return accountant file the paperwork for them. This approach is often preferred by HMRC and, where relevant, individuals such as mortgage lenders, as it is a strong indicator that the information on the tax return is accurate.

Contact WIS Accountancy if you would like to take advantage of a professional tax return service with a designated accountant.

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What should I include in my self-assessment return?

  • Income: you should declare all taxed and untaxed income from your own business, taxable interest (from savings), dividends from shares and capital gains from the sale of assets.
  • State pension: you should declare the amount of state pension you were entitled to, plus any lump sums you received.
  • Private pensions: submit the gross sum of any lump sums or annuities.
  • Benefits: any payments you have received from jobseeker’s allowance or incapacity benefit, plus the total from taxable benefits like carer’s allowance, bereavement allowance and industrial death benefit. If your income totals more than £50,000, you must also declare your child benefit.
  • Other income: anything that doesn’t fall under interest on savings or dividends. Allowable expenses can also be included in this.
  • Pension contributions: list all payments in which deductions were calculated after tax.
  • Charitable donations: include the full sum of Gift Aid donations.
  • Student loan payments: detail all deductions your employer made.
  • Marriage allowance: this is where you transfer a portion of your personal allowance to your spouse if your own earnings are less than the current personal allowance.

It’s best to collect all the information you need before you begin filling out the tax return. Your accountant can help you deal with this process if you are uncertain about anything.

Be sure to have:

  • Your National Insurance number
  • Your Unique Taxpayer Reference (UTR)
  • Records of earnings (accounts, invoices, receipts, etc.)
  • Records of business expenses you intend to declare
  • Evidence of contributions to pensions/charities
  • Your P60 and/or P45

When is the Self-assessment return deadline?

As they are used to calculate your tax liability, self-assessment tax returns are based on money in for the last tax year, not the calendar year. The tax year starts on 6 April and finishes the following 5 April, and self-employed individuals must submit their tax return by the end of the following January.

If you or your accountant are submitting a paper tax return, the deadline is earlier – it must be submitted by the end of October. Your tax bill must be paid by the end of the following January as well, but bear in mind that you may already have paid towards this bill if you pay your tax by payments on account.

HMRC can charge increasingly expensive penalties for anyone who fails to submit before the deadline for tax returns. It starts with a £100 fine from the very first day it is overdue, so it is in your interest to file on time.

self assessment tax returns

What is a Payment on Account?

If you have your own business, in addition to paying tax for the previous tax year, you must also pay tax for the current year in two instalments. The name for these payments is ‘Payments on Account’.

The purpose of this is to spread payments across the year. The due date for the first payment on account is 31st of January, and the second instalment is due on 31st of July. HMRC calculates these payments by assuming you will earn the same taxable amount as you did the previous year, then splits the tax bill in two. If your tax liability is higher or lower than the projected amount, the difference will be settled on the following tax bill deadline (31 January).

Individuals who owe less than £1,000 in tax for the year are not required to make payments on account. This includes many sole traders or self-employed Individuals who are in the early stages of their business. An accountant will be able to advise you on whether or not this applies.

If you are uncertain about any of the steps in this process, give WIS Accountants a call and speak to a tax expert. Our professional team of accountants will be able to help you establish exactly what applies to your business, whether you are a sole trader or otherwise.

What are the penalties for not filing the returns?

If you are registered for self-assessment, you will receive a penalty for failing to file your tax returns before the deadline. This first fine comes on the very first day after the deadline. Here are the fines for late tax returns:

  • 1 Day Late: £100 fine
  • Up to 3 Months Late: £10 added to the initial £100 for each additional day (capped at 90 days) for a potential fine of £1,000
  • 3-6 Months Late: In addition to the previous £1,000 fine, you will be fined either £300 or 5% of the tax due (whichever is higher)
  • 6-12 Months Late: An additional £300, or 5% of the tax due, on top of the previous penalties.

Essentially, you are strongly advised to submit your tax return and pay your tax on time, or you or your business could take an unnecessary financial hit. Get an accountant if you think you won’t have time to get the work done.

HMRC Self-Assessment Accounting Services for Contractors and Freelancers

You can hire the services of accountants to complete your self-assessment on time and accurately. This is an excellent service for many small business owners like sole traders (contractors and freelancers), or people in a business partnership.

The benefit of using an accountant to file my self-assessment return

With an accountant assigned to the case, you have a tax expert preparing and filing your documents, removing the stress and worry of deadlines and requirements.

Freelancers and small businesses that use an accountant get the peace of mind that comes with knowing their taxes are in good hands. They have expert advice just a phone call away, with all the complex accounting taken care of. Accountants will need you to answer a few questions and submit the documents that are relevant to your business. They can provide support in collecting the right documents and ensure everything is filed in line with the relevant employment law.

Why Choose WIS Accountancy for Self-assessment accountancy service?

WIS Accountancy offers stress-free professional tax accounting services with fixed fees at a very fair price. We provide tremendous value for money, and our long list of extremely satisfied customers is a testament to our highly professional accounting services. Our accountants always make it their job to go the extra mile to support our clients and offer expert service and advice on taxes, take-home pay and everything else relating to your return.

You won’t have to worry about your accounts as one of WIS Accountancy clients. If you would like to learn more about how our accountants could help you, pick up the phone or get in touch via email – we’d love to hear from you!