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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How to Get Help
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.
SELF ASSESSMENT TAX Return
Frequently Asked Questions Regarding Self-Assessment Tax in the UK
What does HMRC stand for in the UK?
The term (HMRC) stands for Her Majesty's Revenue and Customs. It refers to the UK government's tax agency. The company, also known as Her Majesty's Revenue Services It is responsible for collecting taxes, paying child support, enforcing tax and customs laws, and enforcing minimum wage payments by employers.
What if I can’t pay the tax due?
Who Needs To Send A Self-Assessment Return?
You need to send self-Assessment tax returns. If you are a self-employed, sole trader and have earned more than £1,000/month in the financial year, a business partner, an executor/administrator of a deceased’s estate, a company director not paying taxes under "PAYE". You also have to send self-assessment tax returns if you have any other sources of untaxed income, like renting out a property, have a foreign income source etc.
How to complete a self-assessment tax return for the first time?
If you are self-employed and have earned more than £1,000/month this tax year, you will need to file a self-assessment return to pay income tax on your profits. If you want to know how to fill out your tax return for the first time, you can follow to following steps.
- Get Yourself Registered with HMRC.
- Get Your Unique Taxpayer Reference Number by following the instructions in the letter on how to set up your Government Gateway Account (GGA).
- Get The Activation Code for Your Government Gateway Account send by HMRC.
- Complete Your Account Setup.
When can I do my self-assessment tax return for 2021?
If you choose to file a tax return on paper then the deadline is 31 October 2021 midnight, or if you want to submit your self-assessment tax returns online then the last date will be 31 January 2022 midnight.
Can you go to jail for not paying taxes in the UK?
Tax evasion can result in large fines, and the UK's maximum penalty for tax evasion can even result in jail sentences. The penalty and the average penalty for tax evasion may vary.
Does HMRC check your bank account?
HMRC has the power to verify the personal data of taxpayers against whom it is being investigated by issuing a "third party notice" to banks and other institutions. HMRC does not require the approval of a tax court to issue this notice.
How do I apply for a tax refund (UK)?
You can find the form on the UK gov site, use this form and follow the instructions to request a refund of income tax if you overpaid mistakenly. They will refund you back, or you can contact us we can help you to solve your problem.
What information do I need to complete my tax return?
Here are some typical things you might need to have for a specific tax year.
- Information of the income and expenditure of self-employment (contain both profit loss).
- Information of property income and expenditure on it.
- Information of saved income and pension income.
- Information of eligible capital gains.
- Interest certificates from banks.
What is self-assessment tax?
Self-assessment tax is a system used by HMRC to collect income tax in the UK. The tax is usually automatically deducted from wages, pensions and savings through "PAYE", but people and companies with other income must report this in a tax return. You can pay tax returns either online or by paper.