SELF ASSESSMENT TAX
What is Self-Assessment Tax?
HM Revenue and Customs (HMRC) uses a Self-Assessment system to collect Income Tax in the UK. In most of the case, if you are already registered, this tax is deducted at source like from wages, pensions, and savings, through "PAYE". If this is not the case for you, you will have to pay your taxes through the Self-Assessment Tax Returns system. The term 'Self-Assessment' refers to the responsibility of individuals as well as companies, to work out the exact amount of tax they owe to the government.
You can pay self-assessment tax either online or by paper. If you file it online, you must send it to HMRC by 31st January after the end of the relevant fiscal year. If you send the paper tax returns to HMRC, they must be with HMRC by 31st October after the end of the fiscal year.
Deadlines of Self- Assessment Tax Returns
In the UK, the financial year runs from 6 April to 5 April. If you are planning to send your self-assessment returns online, you MUST file it before 12:00am, on 31st January i.e. the midnight of 31st. Missing this date, can cause you penalty even if you have no taxes to pay. If you are paying your first payment on account (meaning advance payments towards your tax bill), then this deadline also applies to you.
If you’re self-employed, paying your taxes through payments on account, then you must pay the second payment on account before midnight on 31 July. However, for sending the paper tax return to HMRC is 31st October.
If however, you are submitting a Self-Assessment for the first time, you must register by 5 October.
Who Needs To Send A Self Assessment Return?
Everyone living in the UK must send a tax return for a financial year (6 April to 5 April), who is:
A self-employed sole trader and has earned more than £1,000/month in the financial year.
A business partner in a partnership company.
An executor/administrator of a deceased’s estate.
A company director not paying taxes under PAYE.
If your only source of income is from your wages or pension, you do not need to send a tax return. But you may have to send tax returns if you also have any other sources of untaxed income, like:
You are earning money from renting out a property.
Getting money from tips and commissions.
Have savings, investments, and dividends from where you are getting income.
Have a foreign income source.
a. Get Yourself Registered with HMRC: You have to register online via HMRC. The process depends upon whether you’re self-employed, a partnership company, or not self-employed, etc. - you should click on the option that applies to you in the online registration form.
b. Get Your Unique Taxpayer Reference Number: HMRC will send you, your Unique Taxpayer Reference Number (or UTRN) in a letter after you have registered. Follow the instructions in the letter on how to set up your Government Gateway Account (GGA).
c. The Activation Code for Your Government Gateway Account: After the above process is complete, you will receive another letter from HMRC in the post with your activation code. You will need this code to complete the process of setting up your account. You have to do it within the given time as the code has an expiry date.
d. Complete Your Account Setup: Once your Government Gateway Account is complete, you'll be able to log in and submit your tax returns. According to HMRC, this whole process can take up to 20 working days. So time management is as important as anything else so that you don’t miss the deadline.
Step-By-Step: How to Register For Self-Assessment
If this is your very first time you are submitting a tax return, you must register for self-assessment before sending tax returns. You need to follow the following steps:
Where to Get Help for Self- Assessment Tax?
As the name shows, Pro Tax Accountants, are basically tax accountants. In other words we are Self-Assessment Tax Accountants. We have a team of professional tax accountants ready to help you with your taxes from getting registered to pay the properly prepared tax returns with the deadline.
All you have to do is to go to our quotation page and fill up this FREE forma and send it, and that is it.
Once you have submitted this form, an expert from the payroll department of our office, will review your requirements and send you a proposal for your consideration. This will include our basic plan for your company and the cost of it. You can approve the proposal straight away or come back to us with any further questions or clarification requirements.
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Quick Self Assessment Tax Calculator
Some Important Points Regarding Self-Assessment Tax Calculation
If your taxable income, other than savings, is less than £ 5,000, the balance may be deducted from your savings. Savings income, above
This balance is debited from the initial savings interest band of 0%.
The amount of an Individual Savings Grant for a financial year, which can be £ 1,000, £ 500, or zero refers to
if they have a higher or an additional income rate in the year. Income tax is charged to the savings bank
Free tariff (instead of the basic, higher, or additional tariff).
If a person receives dividend income that would otherwise be included in the ordinary dividend,
higher or additional rate and income is less than or equal to £ 2,000, the zero dividend rate applies to everyone
Dividend income. If dividend income is more than £ 2,000, the lower portion of dividend income will be
taxed at 0% and anything you receive over £ 2,000 will be taxed at the rate that would apply to that amount if the
the zero dividend rate did not exist.
The amount of £ 10,573 or £ 37,500 and £ 150,000 can be increased if you pay the higher tax rate of 32.5%.
40% or more and make personal contributions to pension and/or gift grants.