What is Self-Assessment?
Self-Assessment also known as a ‘Tax Return’ is a form that business owners of all kinds are required to submit in order to report their annual income and sources to HMRC. These have to be submitted to HMRC by the 31st
of January of each year and run from the 6th
of April, to the 5th
Who should submit a Self-Assessment?
The following individuals are required to submit a self-assessment tax return to HMRC:
- Sole traders earning more than £1,000
- Partners in partnerships
- Limited company directors
- Anyone that earns over £100,000 per annum
You need to send tax return in case you are having other untaxed income such as –
- Income from rental properties
- Income from savings, investments and dividends
- Have made a capital gain
- Any foreign income
When to submit Self-Assessment?
There are various deadlines for submission of self-assessments. The deadline depends on the method of filing. Deadlines for self-assessment tax returns are:
- Online submissions - Submission is required before the 31stof January after the end of the tax year.
- Paper Submissions - Need to reach HMRC before the 31stof October after the end of the tax year.
- If you want HMRC to any outstanding tax within your tax code, spread over the course of the year, you’ll need to submit it before 30thDecember after the end of the tax year.
- In some cases, HMRC may also e-mail or write to you in order to provide a different deadline for submission.
Where do you submit Self-Assessment?
The easiest and the fastest ways of submitting Self-Assessment tax return are:
- Online submission to HMRC via cloud accounting software
- Online submission via HMRC Self-Assessment portal
After submitting to HMRC, you must keep a record for up to 6 previous years in order to save yourself from fines and penalties. If any records of the last 6 years are missing, HMRC can actually fine you for the year in question.
What are the elements of Self-Assessment?
The main elements of self-assessment include the following:
- P60 form - Shows your gross income and tax paid on your salary in a tax year.
- P11D form - Used to report NIC due on expenses and benefits
- National insurance number and employer reference number
- Any capital gain arising from the sale of assets such as shares or property
- Any other tax benefits received from an employment or the government
– Don’t include tax free income in your tax return
Getting ready for Self-Assessment
You must take the following things into consideration before filing your Self-Assessment tax return –
- Do not submit incomplete or incorrect data, information or records as it can lead to fines & penalties from HMRC.
- Make sure you maintain and keep accurate records.
- It is suggested that you must save your invoices, bank statements and other essential paperwork related to your tax return.
- In case you are using estimated figures, you must mention the estimates within the “Any other information” section.
Changes to Self-Assessment
In case you have made any mistake while filing Self-Assessment tax return, you can correct or make amendments to your tax return before the deadlines mentioned below –
- 31st January 2021 for the 2018/19 tax year
- 31st January 2022 for the 2019/20 tax year
You must write to HMRC, if you miss the deadline or want to make changes in your self-assessment tax return for any other tax year.
Your Self-Assessment tax bill will be updated by HMRC on the basis of your request. You may receive a tax rebate or have to pay additional tax based on your amendment.
Ways of paying Self-Assessment Tax
There are various options specified by HMRC to pay self-assessment tax. Every payment method has its own time period of reaching HMRC. The various methods of paying self-assessment tax are as follows:
Payment to be credited (Same day or next day)
- Via online or telephone banking
- Via Debit card or corporate credit card online
- Via CHAPS
- At your bank or building society
Payment to be credited within 3-5 working days
- Via direct debit facility (In case you have already set up your account online with HMRC)
- Via cheque
- Via BACS
Signing up for Self-Assessment
If you have not registered for self-assessment on HMRC’s portal, you must sign up with your unique taxpayer reference number (UTR). This number can be found on the letter received from HMRC in relation to self-assessment.
How Nomisma helps in filing Self-Assessment tax return?
- Nomisma supports every type of self-assessment - self-employed, partnerships, directors, capital gains tax, landlord and rental property tax, foreign income, Non-resident tax, enhanced tax reliefs such as EIS, SEIS or VCT.
- Direct submission of Self-Assessment tax return to HMRC with a single click.
- Gives you the option to submit unlimited Self-Assessment tax returns.
- It stores your report after tax return submission and notifies you whether your tax return has been successfully submitted or not (Successful or failed submission)
- Fully integrated with all the other modules of the software. (Bookkeeping, Payroll and Year End Accounts.)