When should I complete a self-assessment tax return?
When you register yourself as self-employed with HMRC, you are expected to keep track of your earnings and to report them yourself. Your taxes are calculated based on the honest reporting of your self-assessment tax return.
Those who need to complete a tax-return include sole traders and those who make non-standard income, including those who make money outside of the standard pre-taxed PAYE system.
Your self-assessment tax return is by far the most important part of your tax reporting should you have this status, however, it’s also one of the easiest tax return systems to make a mistake with if you’re not on top of things. In this post, we’ll help you understand when to complete a self-assessment tax return and what form that might take.
When Should I Submit This Form?
If you are required to submit a self-assessment tax return, you need to file it before the 31st of January each year. This will decide how much national insurance and income tax you are required to pay each year, which also carries the same deadline.
You can access your self-assessment account online on HMRC’s website, using your Unique Taxpayer Reference (UTR). If you no longer have this information, their support team is usually more than able to help you get access to your account by using your address, birth date, national insurance number, and other personally-identifying information.Remember – while it is important to submit your self-assessment tax return as soon as you can, it’s also essential to register as requiring a self-assessment tax account as soon as you begin work in a self-employed capacity.
What Happens If I Don’t File In Time?
If you don’t file your taxes in time, it’s very easy to incur penalties. This often starts at £300 and increases (sometimes £10 a day you don’t file), doubling every quarter you fail to submit your taxes. Furthermore, not paying penalties can lead to further penalties on your account, which, of course, incentivizes correct reporting earlier.
Don’t worry though, HMRC actively sends you letters to let you know when you need to report by, and what form this takes. You can also set up alerts for your online account to make sure you don’t miss a deadline, or that you keep up with the messages HMRC is sending you.
Furthermore, it’s possible to add 2-factor authentication to your account, in order to reduce the chance of fraud and an unnecessary delay that stops you from filing as appropriate.
Some Practical Advice
It’s important to file your return and save money to pay off this cost throughout the year. We would also recommend that you use a self-assessment tax return service if you wish to ensure every I is dotted, and every T is crossed. Accountancy services can file on your behalf if necessary, and if you find yourself missing deadlines or suffering penalties, an accountant may be able to help negotiate with HMRC and help you get up to date.
With this advice, we hope you can complete your self-assessment tax return in confidence.