Who Needs to File a Self-Assessment Tax Return?

Self-assessment is how HM Revenue and Customs (HMRC) collects income tax on earnings not taxed at the source. You need to file if:

• You’re self-employed, freelancing, or running your own business. (Good news: The Trading Allowance lets you earn up to £1,000 tax-free on side hustles.)
• You’re a partner in a business partnership.
• You earn over £10,000 in savings or investment income before tax.
• You have untaxed savings or investment income above your Personal Savings or Dividend Allowance.
• You need to claim tax reliefs or refunds.
• You’ve made capital gains over £3,000 (from April 2024).
• You’re hit by the High Income Child Benefit Charge (income over £60,000 from April 2024).
• You rent out property or earn overseas income (£2,500+ net or £10,000+ gross).
• Your PAYE income is over £150,000.
• You contribute heavily to pensions affected by the tapered annual allowance.

Key Self-Assessment Deadlines

• 5 October: Register for self-assessment (if you’re new).
• 31 October: Paper return deadline.
• 31 January: Online return deadline and tax payment due.
• 31 July: Second payment on account (if required).

Late Filing Penalties:

• £100 fine for being up to 3 months late.
• £10 daily penalties after 3 months (up to £900).
• £300 or 5% of tax due after 6 months.
• Another £300 or 5% penalty after 12 months—up to 100% of the tax due in severe cases.

Filing Online with HMRC: A Step-by-Step

HMRC’s online service is user-friendly and intuitive. Just have your Government Gateway ID handy. The main sections include:

• Employment: Income and benefits.
• Self-employment: Business income and expenses.
• Property: Rental income and deductions.
• Savings and investments: Interest, dividends, and gains.
• Other income: Anything else.

Avoid These Common Mistakes

• Forgetting income streams: Declare ALL your income.
• Claiming ineligible expenses: Only deduct business-related costs.
• Typos and miscalculations: Double-check everything.

Avoid These Common Mistakes

• Forgetting income streams: Declare ALL your income.
• Claiming ineligible expenses: Only deduct business-related costs.
• Typos and miscalculations: Double-check everything.

Maximise Allowances and Reliefs

• Personal Allowance: £12,570 tax-free.
• Savings Allowance: £1,000 (basic rate), £500 (higher rate).
• Marriage Allowance: Transfer £1,260 to your spouse for up to £252 in savings.
• Capital Gains Tax Allowance: £3,000 from April 2024.

Claimable Expenses for the Self-Employed

• Office costs: Software, stationery, printing.
• Travel: Mileage, public transport, accommodation.
• Clothing: Uniforms and safety gear.
• Staff costs: Wages, subcontractor fees.
• Stock and materials: Supplies for production.
• Financial costs: Insurance, bank fees, accountancy.
• Marketing: Advertising, website costs.
• Utilities and rent: Energy, internet, phone.
• Equipment: Laptops, tools, vehicles.
• Training: Courses related to your business.
• Home office: A portion of your home expenses.

Paying Your Tax Bill

Once filed, HMRC calculates what you owe, including payments on account. Key dates:

• 31 January: Full payment and first instalment on account.
• 31 July: Second instalment on account.

Payment Methods:

• Bank transfer
• Debit/credit card (fees for credit cards)
• Direct debit

Can’t pay on time? Contact HMRC early for a Time to Pay arrangement.

Pro Tips for Tax Efficiency

• Stay organised: Use accounting software to track everything.
• Use allowances smartly: Don’t leave money on the table.
• Pension contributions: Lower your taxable income.
• Time your sales: Manage asset disposals to cut tax bills.

Let’s Simplify Self-Assessment

Self-assessment doesn’t need to be daunting. Stay ahead of deadlines, know your allowances, and keep your finances in check. Need extra support? Plus Accounting can make tax time stress-free. Get in touch today and take control of your financial future with PLATF9RM.

Let’s make tax less taxing.