Self-Assessment and the Self-Employed
Every small business owner must complete and file a self-assessment tax form each year. You must complete a self-assessment tax return if you are:
- Self-employed as a sole trader or are working in a partnership.
- You are a company director.
- Operating a business in addition to your employment that earns you more than £2,500 a year.
Tax return: PaperIf you don't want to file your tax return online, you still have the option of completing the full paper return. It is your responsibility to ensure that all the information you give is accurate. Don't forget that even if your accountant completes the tax return for you, once you have signed the form you are responsible for the accuracy of the content.
You can download the self-assessment tax form (SA100) from the HMRC website at: www.hmrc.gov.uk/forms/sa100.pdf. This is the main part of the form. You will most likely have to complete what are called additional pages to reflect the specific income you are telling the HMRC about. These additional pages include: self-employment (SA103), Employment (if you are a company director)(SA101) and partnerships (SA104). You can download these additional pages from the HMRC website: www.hmrc.gov.uk/individuals/fgcat-individualtaxreturn.shtml.
If you would rather receive your form and additional pages through the post, you can call the HMRC Self Assessment Orderline on: 0845 9000 404.
Tax return: OnlineThe government is keen to move as many of its services online as possible. Your self-assessment tax form can be submitted online along with any additional pages you have to send. If you choose to file your tax return online you will be able to instantly see how much tax you owe or how much tax must be refunded to you.
Before you can use the online service you have to register and set-up a new account on the Government Gateway. You can do this via the HMRC website: http://online.hmrc.gov.uk. You will be sent an activation code via post that you will need to type in to access your unique account. Once this is done, you can complete your self-assessment return and file it online.
Dates for Your DiaryYour tax return will be issued each year in April when the official tax year ends. Each tax return you file with the HMRC covers your business's activities over the previous year. You have a choice as to whether you work out the income tax you must pay, or you can get the HMRC to do the calculations for you. If you want to submit a paper self-assessment form and want your tax worked out for you, you must send in your form by September 30th.
Once the tax you owe has been worked out, this is due to be paid in two instalments. The first is by January 31st, with the second instalment due by July 31st. Note that you may have to pay 'tax on account' depending on how much tax you paid last year. Consult your accountant as these payments can come as a nasty shock if you're not expecting them.
Making Self-Assessment PainlessThe more planning you do throughout the year, the better position you'll be in when it comes to completing your self-assessment tax return. Use the checklist below to help you make tax less taxing:
- Submit your return online
Using the Internet to complete and send in your form makes the whole process much easier and faster to complete.
- Get organised
You will have to fill in a number of sections on your form. Organise your accounts so you can locate these figures easily.
- Double-check everything
Before you sign your form and submit it carefully check all that you have completed all the sections you need to and have including any additional pages that relate to your specific income or business type. Also check the amount of tax you are being asked to pay. The Revenue isn't perfect and mistakes have been made.
- Meet your deadlines
Don't leave your form until the last minute as this can lead to mistakes being made. Also, ensure you have plenty of time to complete your form and additional pages so the tax deadlines are not missed.
More information about self-assessment is on the HMRC website: www.hmrc.gov.uk/sa. If you have any questions you can call the self-assessment helpline on: 0845 9000 444.