Self-Assessments Tax Returns (SA100)

What is a Self-Assessment Tax Return?

The tax return outlines how much income an individual earned and where it came from throughout the tax year. Most business owners should prepare a tax return, submit it to HMRC, and pay their tax obligation by midnight on 31st January of each year.

Do I need to file a Self-Assessment Tax Return?

As a rule of thumb, everyone who gets income that is not taxed at source is required to submit a Self-Assessment tax return.

For example, if you are a sole trader (self-employed), your income is not subject to National Insurance Contributions or Income Tax, but you must report it to HMRC on a Self-Assessment form so that they can calculate how much tax you owe.

If you are a limited company director, you must normally complete a Self-Assessment tax return to inform HMRC of any dividend income you have received from your company.

Anyone earning more than £100,000 in a tax year is required by HMRC to file a self-assessment tax return. One of the reasons for the need is so that HMRC may verify how people earn money and to make sure correct personal allowances are claimed.

Some examples of taxable income not taxed at source but that should be reported on your self-assessment tax return are:

- Rental income

- Investment income

- Bank interest

- State pension

- Foreign income

Registering for Self-Assessment Tax Return

Individuals who believe they are required to file a Self-Assessment tax return for a certain tax year should register with HMRC. The registration deadline is the 5th of October of the calendar year after the conclusion of the tax year. Here is the link to do so:

Completing and Filing a Self-Assessment Tax Return

Individuals can complete and file their Self-Assessment tax return online through the HMRC website or using tax return software. Individuals who are unable to file online may be able to download and fill out hardcopy paperwork.

This is also an excellent time to hire a competent tax advisor. Most of the time, filing your tax returns accurately and on time, will more than outweigh the expense of the tax adviser.

What is the Self-Assessment Tax Return Deadline?

The deadline for submitting an online Self-Assessment tax return to HMRC is midnight on the 31st January after the end of the relevant tax year. The deadline for submitting a paper tax return to HMRC is the 31st of October after the end of the relevant tax year.

When do I have to pay my Income Tax?

The payment date is the same as the deadline for completing a Self-Assessment tax return online: the 31st of January after the end of the applicable tax year. We strongly advise filing your tax return online ahead of the deadline to prevent missing the payment deadline and incurring a penalty. If you have any payments on account (see below) to make, the second of these is due by 31^st July.

What is a Payment on Account?

Payments on account are tax payments made by Self-Assessment taxpayers twice a year to spread the expense of the future tax year.

They are calculated depending on your tax bill from the preceding year. In other words, HMRC forecasts your future earnings based on your past earnings. They are due in two instalments, with deadlines of 31 January (same as your filing deadline) and the following 31 July.

This means that the first instalment is due on the same day you file your Self-Assessment tax return and pay your bill for the previous year, so make sure you have enough money saved up to avoid an unexpected surprise before Christmas and New Year.

How can I pay my Self-Assessment tax bill?

Direct debit, cheque, online bank transfer, and payment through your online gateway account are all options. Please follow the link below for a complete list of payment methods:

Pay your Self Assessment tax bill: Overview – GOV.UK (www.gov.uk)

What happens if I don’t file my Self-Assessment Tax Return on time?

Anyone who is obligated to file a return but fails to do so by the deadline is automatically fined £100 by HMRC; the penalty is levied whether or not you owe taxes. If you do not file within three months, by the end of April, HMRC can levy an extra £10 daily penalty for the next 90 days.

You will also be charged interest on late payments of taxes.

Recent reporting changes – MTD ITSA

MTD for ITSA will be implemented from April 2024. The guidelines compel landlords and self-employed individuals earning more than £10,000 per year to use appropriate software to maintain digital records and submit changes to HMRC. This is true for rental properties and furnished holiday homes that are rented.

Yearly tax returns will be phased out in favour of four quarterly updates, a End of Period Statement (EOPS), and a Final Declaration.

It is not yet clear whether HMRC will want to collect the income tax payments over the four quarters.

Allow Finanche to relieve you of the burden of tax

By taking advantage of the tax planning services we provide our clients, you can focus more on your business, allowing it to develop and expand rather than spending more time and money on taxes.

Our chartered certified accountants will work directly with you to ensure that we ethically and effectively reduce your tax liabilities while increasing your wealth.