How do I complete a self assessment tax return?
Updated: Apr 21
Self-Assessment tax return can look very daunting, but if you’re prepared, organised and understand what you’ll be asked for they’re a lot simpler than they look. In this article you’ll find out if and when you need to fill one in, when you need to register, what sections you’ll need to fill out, what expenses you can claim and how to pay your final tax bill.
Do I need to fill in a Self-Assessment tax return? Yes if
your self-employment income was more than £1,000 before expenses.
your income from renting out property was more than £2,500 (you will need to contact HMRC if it was between £1,000 and £2,500)
you earned more than £2,500 in untaxed income, for example from tips or commission.
your income from savings or investments was £10,000 or more before tax.
you need to pay Capital Gains Tax on profits from selling things like shares or a second home.
you are a director of a company (unless it was a non-profit organisation, such as a charity)
you, or your partner’s, income was over £50,000 and you are claiming Child Benefit
you have income from abroad you need to pay tax on, or you live abroad but have an income in the UK.
your taxable income was over £100,000.
if you earn over £50,000 in the 2020/21 tax year and make pension contributions you may have to complete an assessment to claim back the extra tax relief you are owed
you are a trustee of a trust or registered pension scheme.
your State Pension was more than your personal allowance and was your only source of income.
you received a P800 from HMRC saying you did not pay enough tax last year.
You can also fill in a Self-Assessment tax return if you want to make voluntary Class 2 National Insurance Contributions (NICs) to help you qualify for benefits such as the State Pension. You usually do not need to fill in a Self-Assessment tax return if you are an employee who has paid tax through the Pay as You Earn (PAYE) system unless you earnt over £100,000.
How to register for a Self-Assessment tax return?
If you have never submitted a return before, you will first need to register for Self-Assessment. There are different ways to register if you are self-employed, not self-employed but need to declare income, or if you are in a partnership. Walsh West can help you to do this.
Once you have registered, you will be sent your Unique Taxpayer Reference (UTR).
If you want to submit your Self-Assessment form online, you will then need to set up a Government Gateway account. To do this, follow the instructions in the letter containing your UTR. Once you’ve set-up the account you will get an activation code in the post, which you need to complete the set-up of your Gateway account. If you have submitted Self-Assessment tax returns before, you will need your old UTR to register and set up the account.
If you are unsure on any part contact us and we can help you.
What are the Self-Assessment deadlines?
You submit tax returns for tax years, not calendar years, and you do this in arrears. For example, for the 2021/22 tax year, running 6 April 2021 to 5 April 2022, you would:
need to register for Self-Assessment by 5 October 2021 if you have never submitted a return before.
submit your return by midnight 31 October 2021 if filing a paper tax return.
submit your return by midnight 31 January 2021 if filing online.
pay the tax you owe by midnight 31 January 2022.
If you fail to meet one or more of these deadlines, you might be charged a penalty fee.
What information will I need to fill in a Self-Assessment tax return?
If you have never filled in a self-assessment tax return before, it can look very daunting. However, once you understand the process, it’s relatively simple, as long as you have all the information you need. Before you start, make sure you have:
your 10-digit Unique Taxpayer Reference (UTR)
your National Insurance numbers
details of your untaxed income from the tax year, including income from self-employment, dividends and interest on shares
records of any expenses relating to self-employment
any contributions to charity or pensions which might be eligible for tax relief
P60 or other records showing how much income you received which you’ve already paid tax on.
It is also a good idea to read the relevant HMRC help sheets, particularly on the extra sections, or supplementary pages, relating to why you’re filling in the Self-Assessment tax return.
How to fill in a Self-Assessment tax return There are two sections to a Self-Assessment tax return. The main section is the SA100, which deals with:
taxed and untaxed income in the form of dividends and interest
benefits, including State Pension, Child Benefit and Blind Person’s Allowance.
If you have income to declare as a company director, a foreign national (or dual resident), from self-employment, property, Capital Gains, or from abroad, you will also need to fill in a supplementary page.
You do not have to fill in the short-form tax return (SA200) unless you are sent it by HMRC.
For help and advice with the completion of your return please contact us.
Paying your Self-Assessment tax bill
Once you’ve submitted your Self-Assessment tax return, you will be told how much tax and, if you’re self-employed, National Insurance Contributions (NICs) you will need to pay.
When do you need to pay?
The deadline for payment is 31 January.
Can I pay my tax bill in instalments?
Yes, you can make payments in instalments, but these are an advance on your next tax bill.
You can arrange for what is called a budget payment plan through your online account and decide how much you want to pay each week or month. You can also choose to stop paying for up to six months.
The only restriction is you must be up to date with your previous Self-Assessment payments.
However, you cannot use this to pay for a previous tax bill in instalments.
How do I pay my tax bill?
There are many ways to pay your Self-Assessment tax bill, but the length of time depends on which method you choose. If you’re making your payment close to the deadline day, you should choose one of the faster options to make sure you don’t get penalised.
Online or telephone banking, Clearing House Automated Payment System (CHAPS), debit or corporate credit card and in person at your bank or building society, are the fastest ways to pay.
But, you can arrange for a bank transfer, Direct Debit or send a cheque.
What if I miss the deadline?
If you miss the deadline to register, submit your return or pay your bill you will get a penalty.
If you are up to 3 months late filing or paying tax, there is a penalty of £100. If it is later than this the penalty will be more. You can also be charged interest on late payments.
If you have a reasonable excuse you can appeal.
What if I make a mistake?
You do not need to fill in your Self-Assessment tax return all in one go, so it’s a good idea to start early and take your time to minimise mistakes.
Before you officially submit you will be given the chance to go over your return and correct any errors you have made.
If you realise you’ve made a mistake after you’ve submitted you can still make changes up until the filing deadline the year after. This means, for the tax return you submitted by 31 January 2020, you can make changes up until 31 January 2021.
Payment on account
Because of the coronavirus outbreak, the government has announced any income tax payments due in July 2020 have been deferred until January 2022.
Unless your last Self-Assessment tax bill was less than £1,000 or you’ve already paid more than 80% of all the tax you owe, you will be asked to make ‘payments on account’ towards your next tax bill.
‘Payments on account’ are made up of two payments, each of which is half of your previous year’s tax bill and are due by 31 January and 31 July.
National Insurance Contributions (NICs) and Capital Gains Tax are not included in your Payments on Account and will need to be paid in full by the 31 January deadline.
For example, if your tax bill for 2018/19 was £1,500, during the 2019/20 tax year you will make two payments on account of £750 each. When you come to submit your 2019/20 tax return, these two payments are deducted from your tax bill.
So, if your 2019/20 tax bill was £3,000, £1,500 (two payments on account) will be deducted and you will have to pay £1,500 as a balancing payment, plus an extra £1,500 as your first payment on account for the 2020/21 tax year.
If your tax bill is less, HMRC will send you a refund. If you know your tax bill will be lower, you can contact HMRC and ask for a reduction on your payments on account.
Time to Pay service
If you have an outstanding payment, or are worried you might miss a future payment, call the HMRC Time to Pay helpline on 0300 200 3822.
To use the Time to Pay service you must have a Self-Assessment tax bill of between £32 and £30,000.
You must also have no outstanding tax returns, have any other debts or payments set up with HMRC.
If you are not eligible under these requirements, you might still qualify for Time to Pay, but you will need to contact HMRC directly.
You will have to pay interest on any tax paid late, and this will be added to any outstanding balances from February 2021
What if you cannot afford to pay your tax bill?
If you cannot afford to pay your tax bill, you need to contact HMRC as soon as possible by calling the Business Payment Support Service on 0300 200 3825. This line is for everyone, not just for businesses.
HMRC will look at how much you owe, your income, expenditure, assets, savings, and investments and decide whether or not you will be given more time to pay.
If you do not pay on time, it’s likely you will have to pay interest and penalty charges.
You might be offered more time to pay or offered the chance to pay in instalments.
Tax is a priority debt, so if you can’t, or are struggling to pay your tax bill, it’s vital to take action straight away and call the Business Payment Support Service.
If you don’t and simply refuse to pay, HMRC will take enforcement action against you. This can include directly collecting what you owe through your earnings, bank account, pension, or through repossession, or a debt collection agency.
You could also be faced with court action; risk being made bankrupt or having your business closed down.
For advice on Accounting and Taxation; call our team on
0203 488 7503 / 01992 236 110