A Self Assessment tax return is a form, available in both online and paper formats, that individuals must submit to HMRC annually if they owe tax on their income. While some taxes are automatically deducted from salaries or pensions through the Pay As You Earn (PAYE) system, individuals with additional sources of income—such as self-employment, property income, capital gains, or dividends—must report this information to HMRC using a Self Assessment tax return.
Who should file a Self Assessment tax return?
Here are the circumstances under which you need to file a Self Assessment tax return:
- If you are self-employed and your income, before expenses, exceeds the annual trading allowance of £1,000.
- If you are a partner in a business.
- If your property income exceeds specific limits.
- If you wish to claim tax relief on employment expenses that exceed £2,500 in a tax year.
- If you have capital gains tax liabilities that haven’t already been settled within the tax year.
- If you hold a position as a minister of religion, regardless of faith or denomination.
- If you receive income from a trust or an estate of a deceased person, further tax is due.
- If you receive foreign income unless it consists solely of dividend income that, combined with any UK dividend income, is below the annual dividend allowance.
- If you need to make a claim for relief under a double tax agreement or for the remittance basis, where this does not apply automatically.
- If you are a non-UK resident with taxable income in the UK.
- If your income from UK savings and investments is £10,000 or more, excluding ISAs.
- If your income from UK dividends is £10,000 or more, also excluding ISAs.
- If you have any other untaxed income of £2,500 or more.
- If your total taxable income is £150,000 or more before tax (note that this threshold was previously £100,000 until the 2022/23 tax year).
- If you need to pay the High Income Child Benefit Charge.
- Individuals who received an HMRC document indicating underpaid tax the previous year.
What do you need before starting your Self Assessment tax return?
Before starting your tax return, it is advisable to gather all necessary information, including:
- Your National Insurance number
- Your Unique Taxpayer Reference (UTR) number (see point 2 below)
- Accounts, invoices, receipts, and other income records
- Documentation of any relevant expenses
- Records of contributions to pensions or charities
- P60 and P45 forms
Additional records, such as tenancy agreements, may be required depending on your situation.
Registering for Self Assessment
If you’re submitting a tax return for the first time, you need to register for Self Assessment. Here’s how:
1. Register with HMRC
The registration process varies depending on your situation (self-employed, partnership, or not self-employed). You have the option to register online via the HMRC website.
2. Obtain your Unique Taxpayer Reference (UTR) number
Upon completion of your registration, HMRC will dispatch a letter to you containing your UTR number and instructions for setting up your Government Gateway account. Retain this number – this is your lifetime account.
3. Activate your Government Gateway account
You’ll receive a subsequent letter containing your activation code. Prompt completion of this step is essential, as the code expires after a certain period.
4. Complete your account setup
Once your Government Gateway account is active, you can log in and submit your Self Assessment tax return.
HMRC advises that the registration process may take up to 20 working days, so it’s wise not to leave this until the last minute.
Filling in a Self Assessment Tax Return
When submitting your Self Assessment tax return online, you need to complete only the sections relevant to your circumstances. Using the online version enables you to identify the relevant sections from the outset.
Generally, most individuals will need to fill out the SA100 form. However, certain supplementary pages may be necessary based on your specific situation.
It’s crucial to remember that HMRC now has access to data from various sources, including Airbnb, eBay, and others. You must declare all income sources, including any side hustles or additional earnings. Don’t assume that HMRC won’t discover undeclared income.
Some employees, pensioners, and self-employed individuals with an annual turnover below £85,000 may receive a simplified SA200 return. This form is significantly shorter, comprising just four pages. Note that you cannot choose to use this shorter version; it will be determined and provided to you by HMRC.
In preparing your tax return, you will need to include a variety of details, such as:
- Income: Record all taxed and untaxed income from self-employment, taxable interest from savings, dividends from shares, and capital gains from asset sales.
- State Pension: Provide the total amount of state pension payments you were entitled to and any lump sum received.
- Private Pensions: Detail the gross amounts of any annuities or lump sums.
- Benefits: Include any incapacity benefits, jobseeker’s allowance, and the total taxable benefits from bereavement allowance, carer’s allowance, or industrial death benefit.
- Other Income: Specify any income not related to interest or dividends, including allowable expenses associated with this income.
- Pension Contributions: List all payments made where tax deductions were taken.
- Charitable Donations: State the total amount of Gift Aid donations made.
- Blind Person’s Allowance: Confirm if you are claiming this allowance.
- Student Loan Repayments: Document any deductions made by your employer for student loan repayments.
- High Income Child Benefit Charge: This applies to those receiving child benefits whose income, or their partner’s income, exceeds £50,000 in the 2023-24 tax year, or £60,000 in the 2024-25 tax year.
- Marriage Allowance: This allowance facilitates the transfer of a segment of your personal allowance to your spouse, as long as your income does not exceed the personal allowance threshold (£12,570 for 2023-24 and 2024-25).
Deadlines for Self Assessment Tax Returns
Self Assessment tax is determined by the income accrued in the prior tax year, specifically from April 6 to April 5 of the following year. Your tax return for a given year is typically due in January of the subsequent year.
For the 2023-24 tax return, the critical deadlines are as follows:
- 5 October 2024: Deadline to register for Self Assessment for the first time. If you missed this date, register as quickly as possible and make sure you submit your tax return and make any payments by 31 January 2025. You may still face a penalty but you are showing you have done all you can to comply.
- 31 October 2024: Deadline for paper tax returns
- 31 January 2025: Deadline for online tax returns and tax payment for 2023-24 tax owed. You might have already contributed towards this amount if you were required to make payments on account.
HMRC imposes penalties for late submissions, starting with a £100 fine from the first day your return is overdue. Additionally, if you do not pay your tax by the 31 January 2025 deadline, HMRC will charge interest based on the Bank of England base rate plus 2.5%. If you have any questions or want professional help filing your tax return, schedule a free consultation with us.
