{"id":13013,"date":"2024-12-01T16:56:52","date_gmt":"2024-12-01T16:56:52","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=13013"},"modified":"2024-12-17T17:11:45","modified_gmt":"2024-12-17T17:11:45","slug":"self-assessment-16-common-questions-answered","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-16-common-questions-answered\/","title":{"rendered":"Self Assessment – 16 common questions answered\u00a0"},"content":{"rendered":"
Self Assessment is an HMRC system that individuals must use to declare and pay tax on certain types of income, including self-employed profits, shareholder dividends, and capital gains. To do so, they must file a Self Assessment tax return and pay what they owe to HMRC. \u00a0<\/span><\/p>\n We answer 16 common questions about Self Assessment, including how to register, who needs to file a tax return, and how to pay your tax bill.\u00a0<\/span><\/p>\n Generally, any individual who receives income that isn\u2019t taxed ‘at source\u2019 through Pay As You Earn (PAYE) must send a Self Assessment tax return to HMRC. This includes anyone who:<\/p>\n You may also need to file a tax return if you:<\/p>\n Use HMRC\u2019s online tool to check if you need to send a Self Assessment tax return<\/a>.<\/p>\n You must register for Self Assessment<\/a> before sending a tax return for the first time. Most people can register online. You can do this by creating an HMRC online tax account (or signing in to your existing one) and providing the following details:\u00a0<\/span><\/p>\n It can take HMRC up to 10 working days (21 if you\u2019re abroad) to confirm your Self Assessment registration and issue a Unique Taxpayer Reference (UTR)<\/a>. You\u2019ll also receive a 12-digit activation code in the post within 7 working days (21 if you\u2019re abroad). Sign in to your tax account to activate the Self Assessment service when it arrives.<\/p>\n If you can\u2019t register online, you can fill out form SA1<\/a>, then print and post it to HMRC. The postal address is shown on the form.<\/p>\n Self Assessment guidance for company directors and shareholders<\/span><\/a>\n Self Assessment requirements for limited liability partnerships (LLPs)<\/span><\/a>\n Where can I find my Government Gateway user ID?<\/span><\/a>\n <\/p>\n You must reactivate your tax account if you\u2019ve registered before but didn\u2019t send a tax return last year. You\u2019ll need your Government Gateway sign-in details and UTR to do so. Alternatively, if you can\u2019t use the online form, fill in form CWF1<\/a> instead to reactivate your account.<\/p>\n When you set up a limited company<\/a>, you will need to register for Self Assessment if you receive:<\/p>\n If you\u2019re a company director with income taxed at source (through PAYE) and no further tax to pay, you don\u2019t need to register or complete a tax return\u2014unless your director\u2019s salary<\/a> is more than \u00a3150,000 a year.\u00a0<\/span><\/p>\n The type of tax you pay through Self Assessment depends on the type of income you report on your tax return. You may have to pay one or more of the following:<\/p>\n From 6 April 2024, Class 2 National Insurance is no longer payable by self-employed individuals. However, they\u2019ll still receive access to contributory benefits (including the State Pension) if their profits are above \u00a36,725 a year (the NIC Lower Profits Limit).<\/p>\n If you\u2019re self-employed and your annual profits are under \u00a36,725, you can pay voluntary Class 2 contributions to avoid gaps in your record and protect your entitlement to benefits.<\/p>\n Once you’ve registered for Self Assessment and activated the service in your online account, you can send a tax return (form SA100) to HMRC online or by post. The online option is quicker and simpler. You also get an additional three months to file, and it\u2019s much easier to make changes if you need to fix a mistake.<\/p>\n 6 common Self Assessment tax return mistakes and how to avoid them<\/span><\/a>\n \n To complete and file a tax return online, follow these steps:<\/p>\n You will get an online message to confirm that HMRC has received it. Approximately 72 hours after submission, you should be able to view your return in your online account. If you need to correct anything, you can make changes to your tax return at this point.<\/p>\n You can’t use HMRC’s online service to file your tax return if you:<\/p>\n In these situations, you must use commercial software or download\/request the relevant forms instead.<\/p>\n If you need to send your Self Assessment tax return by post<\/a>, you can download the SA100 tax return form or call HMRC to request a copy. You can also download any supplementary pages you require.<\/p>\n If you need to send a Self Assessment tax return for trustees of a registered pension, you must download form SA970.<\/p>\n Before you get started, make sure you have all the information you need, including:<\/p>\n Your Self Assessment tax return comprises the main section (SA100) and certain supplementary pages based on the type of income you need to declare.\u00a0<\/span><\/p>\n In the main section, you will provide the following information:<\/p>\n In the Self Assessment supplementary pages<\/a>, you can provide information relating to (where relevant):<\/p>\n The online tax return form provides explanations and instructions throughout. You should also read HMRC\u2019s detailed guidance on completing your tax return<\/a> for Self Assessment.<\/p>\n If you file online, you can easily change your tax return after submission\u2014for example, if you make a mistake or forget to include something.\u00a0<\/span><\/p>\n You can amend a Self Assessment tax return<\/a> within 12 months of the filing deadline, either online through your account or by sending another paper return by post.\u00a0<\/span><\/p>\n Landlord tax guide – including buying, selling, and letting property<\/span><\/a>\n Side hustle tax – what you need to know<\/span><\/a>\n 7 types of business taxes you need to know about<\/span><\/a>\n <\/p>\n For example, if you file a tax return for the 2024-25 tax year by the online filing deadline of 31 January 2026, you have until 31 January 2027 to update the return.<\/p>\n HMRC will update your bill based on the changes you report. Depending on the update, you may have to pay more tax or claim a tax refund.\u00a0<\/span><\/p>\n If you need to make changes after 12 months or to a tax return from an earlier year, you must write to HMRC.<\/p>\n If you filed online, follow these steps to make changes to your tax return:<\/p>\n You’ll need to wait at least 3 days (72 hours) after the initial submission before you can update your tax return.<\/p>\n If you submitted your tax return on paper, you can amend it by:<\/p>\n You must write \u2018amendment\u2019 on each page, include your name and UTR, and send the updated pages to the address on your Self Assessment paperwork.<\/p>\n If you can\u2019t find the address, send your amended forms to: Self Assessment, HM Revenue and Customs, BX9 1AS.<\/p>\n You don\u2019t need an accountant or tax advisor to prepare and file your Self Assessment tax return. If your affairs are simple and you can do so, you can complete the tax return yourself.<\/p>\n However, if you\u2019re running a business, claiming lots of expenses, or your requirements are complex, it\u2019s worthwhile seeking expert help and advice from a professional. Doing so can save you time and money in the long run.\u00a0<\/span><\/p>\n You\u2019ll receive your 10-digit Unique Taxpayer Reference (UTR) from HMRC when you register for Self Assessment. HMRC uses this number to identify you for Self Assessment purposes.<\/p>\n Your UTR should arrive by post within 15 days of registration, or slightly longer if you live overseas. It will be printed on the top right-hand side of the letter and may be called a \u2018tax reference\u2019.\u00a0<\/span><\/p>\n However, you should be able to find your Unique Taxpayer Reference sooner in your personal tax account<\/a> or the HMRC app<\/a>.<\/p>\n You will use your UTR on many occasions, including when sending or amending Self Assessment tax returns, paying your personal tax bills, claiming refunds, and contacting HMRC about anything else relating to Self Assessment.\u00a0<\/span><\/p>\n It will be included on previous tax returns and other correspondence from HMRC, such as notices to file a tax return, payment reminders, and late filing notices.<\/p>\n There are several Self Assessment deadlines you need to know. They fall after the end of the tax year that you’re reporting in your tax return.<\/p>\n For example, if you need to send a tax return for the 2024-25 tax year, you must send your return by 31 October 2025 (by post) or 31 January 2026 (online). If you owe any tax, payment will also be due by 31 January 2026.\u00a0<\/span><\/p>\n The Self Assessment deadlines may be different if:<\/p>\n If you miss any of these deadlines, you can still submit your return and pay your bill. However, you will incur penalties.<\/p>\n You’re responsible for paying your Self Assessment tax bill<\/a> to HMRC by the deadline. You can use one of the following payment methods:<\/p>\n Alternatively, you can set up a Budget Payment<\/a> plan to pay in instalments. This will allow you to make weekly or monthly Direct Debit payments towards your next bill, which may help you manage your finances better.<\/p>\n You must contact HMRC as soon as possible if you can’t afford to pay your Self Assessment tax bill<\/a> or you’re unable to pay on time for any other reason.<\/p>\n If you can’t pay it in full, you can set up a payment plan, known as a ‘Time to Pay’ arrangement. This will enable you to pay in instalments over months.<\/p>\n If you don’t contact HMRC or can’t agree on an instalment plan, HMRC may:<\/p>\n Any costs HMRC incurs (e.g. auction fees) may be added to your debt. However, before taking any debt recovery actions, HMRC will notify you and explain your rights, options, and the associated costs.<\/p>\n HMRC will impose the following penalties if you miss the deadline for filing your Self Assessment tax return:<\/p>\n If you fail to pay the tax you owe by the relevant deadline, there should be no late payment penalties if you settle your bill within 30 days of the due date. After that, HMRC will impose the following penalties:<\/p>\n You\u2019ll also be charged interest on late payments until you pay your bill in full.<\/p>\n You may be able to claim a refund (rebate) from HMRC if you’ve paid too much tax. However, if more tax is due in the next 45 days (e.g. for a payment on account), the overpaid amount will be deducted from that balance.<\/p>\n Do I pay tax on my business expenses?<\/span><\/a>\n \n There are different ways to claim, depending on what you’ve paid too much tax on. For example, if the overpayment relates to a Self Assessment tax return or bill, you must claim a refund through your online account.<\/p>\n HMRC provides an online tool that you can use to check how to claim a tax refund<\/a>.<\/p>\n You must keep all records of the income and expenditure you report on your Self Assessment tax returns. These pay and tax records<\/a> should be kept for at least:<\/p>\n You don’t need to include copies of your records with your tax returns. However, HMRC may ask to check them to ensure you\u2019re paying the correct amount of tax. If your records are found to be inaccurate, incomplete, or unreadable, HMRC may charge you a penalty.<\/p>\n Currently, you can keep your Self Assessment records on paper, digitally, or as part of a software program (e.g. bookkeeping software). However, through Making Tax Digital for Income Tax Self Assessment<\/a> (MTD for ITSA), businesses and landlords with qualifying income will be required by law to maintain digital records. These changes will be introduced from April 2026.<\/p>\n You must tell HMRC if you’re no longer self-employed as a sole trader or a partner in a business partnership. You can do this through your business tax account.<\/p>\n If you no longer need to send a Self Assessment tax return for any other reason (e.g. your PAYE income is below \u00a3150,000 or you’ve stopped being a landlord), you can notify HMRC in the following ways:<\/p>\n1. Do I need to send a Self Assessment tax return?<\/h3>\n
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2. How do I register for Self Assessment?\u00a0<\/span><\/h3>\n
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3. Do I need to register for Self Assessment after setting up a company?\u00a0<\/span><\/h3>\n
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4. What tax can I pay through Self Assessment?\u00a0<\/span><\/h3>\n
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5. How do I send a Self Assessment tax return?<\/h3>\n
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When you can’t send a return online<\/h4>\n
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Sending your tax return by post<\/h4>\n
6. What information do I need to include in my tax return?<\/h3>\n
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7. What happens if I make a mistake on my Self Assessment tax return?<\/h3>\n
How to amend an online tax return<\/h4>\n
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How to amend a paper tax return<\/h4>\n
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8. Do I need an accountant to prepare my tax return?<\/h3>\n
9. Where can I find my Unique Taxpayer Reference?<\/h3>\n
10. What are the Self Assessment deadlines?<\/h3>\n
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When the deadlines may be different<\/h4>\n
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11. How do I pay my Self Assessment bill?<\/h3>\n
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12. I can\u2019t pay my tax bill on time\u2014what should I do?<\/h3>\n
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13. What happens if I miss a Self Assessment deadline?<\/h3>\n
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14. Can I claim a Self Assessment tax refund?<\/h3>\n
15. What records do I need to keep for Self Assessment?\u00a0<\/span><\/h3>\n
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