Do I Need To Do A Self Assessment?

Are You Already a Taxpayer in the UK? Do You Require Self Assessment Return? It depends on whether any money remains untaxed income. A self-assessment tax return must be filed if any untaxed money remains (i.e., income outside the tax bracket).

According to a January 2023 report, nearly 6 million individuals living in the UK still need to file their Self-Assessment tax returns by 31 January, despite an upcoming deadline of this date.

HMRC uses self-assessments (SA100 form) to determine how much National Insurance and Income Tax you owe on income that has yet to be taxed.

Do you need to file a Self-Assessment Tax Return? An interactive tool on Gov.uk will tell if filing an assessment return is necessary for you.

This self-assessment guide provides a complete overview, from who needs to complete tax returns to how registering and paying tax returns can help, with this article offering step-by-step advice on completing them correctly.

When Do I Need To Do A Self Assessment & Why is it Important? 

HMRC uses self-assessment as part of its income tax collection process for individuals and businesses with other sources of income.

To avoid penalties, self-assessments must be filed by 31 October if you file by paper or 31 January if you file electronically, regardless of when they were created or whether HMRC requests that one.

If you are registered for self-assessment, a tax return must be filed, even without tax liability. File a requested tax return to avoid penalties, regardless of whether any tax is owed.

You must file the tax return even if you don’t have a tax liability to pay. Regardless of tax liability, if you do not file a tax return to HMRC, they will incur a penalty. 

However, in the 2023-2024 tax year, the Self-Assessment threshold will charge from £100,000 to £150,000 for customers taxed via PAYE. 

This means that employees earning up to £150,000 per year through PAYE will generally no longer be required to file a Self Assessment tax return unless they have other sources of income or specific deductions that necessitate it.

Special Circumstances

If you have any of the following exceptional circumstances, you may need to complete a Self Assessment tax return:

Non-UK Income

If your foreign income is untaxed in the UK, a self-assessment tax return must be completed to report it. This could include:

• Employment income
• Self-employment income
• Investment returns 
• Or property income 

You should report it all under “Foreign Income.”

Capital Gains and Losses

If you have made any capital gains or losses during the tax year, including profits from:

• Selling property 
• Shares and, or investments
• Personal belongings 

Reporting them should be completed on your self-assessment tax return’s “Capital Gains” section.

Inheritance and Trust Income

You may need to complete a self-assessment tax return if you have received income from an inheritance or trust, i.e. if you have rented it out or earned profits from it. 

You should report your inheritance or trust income in one of the following sections of your tax return:

• Trust
• Estate
• Interest
• Dividends

Happens When You Miss a Deadline.

If you miss the deadline for submitting your tax return, you will be subject to penalties. The penalties for late submission are as follows:

• £100 if your tax return is up to 3 months late
• £10 per day for up to 90 days if your tax return is 3 to 6 months late
• £300 or 5% of the tax due (whichever is higher) if your tax return is 6 to 12 months late
• £300 or 5% of the tax due (whichever is higher) plus an additional penalty if your tax return is more than 12 months late

It is important to note that if you have a reasonable excuse for filing your tax return late, you can appeal against the penalty.

How to Do a Self-Assessment?

1. Register

• Register for Self Assessment via the government website gov.uk. 
• Provide your personal information, including your name, address, and National Insurance number. 
• Add details about your income and any expenses incurred.

It is recommended that you register as soon as possible, even if you are unsure whether you need to complete a tax return. This will ensure ample time to gather all the necessary information and complete your tax return before the deadline.

2. Unique Taxpayer Reference (UTR)

Once you have registered for Self Assessment, you will be issued a Unique Taxpayer Reference (UTR). This is a 10-digit number that is unique to you and is used to identify you for tax purposes. 

Use your UTR when contacting HM Revenue and Customs (HMRC) or completing your tax return.

Keep your UTR safe and secure, as it is confidential. You should only share your UTR with your authorised agent, who can file an assessment of your behaviour. If you lose your UTR, you can request a replacement from HMRC.

How To Pay Self-Assessment Tax Return

Gathering Necessary Documents

Gathering all the necessary documents is crucial before you begin filling out your Gathering all the necessary documents is crucial before you begin filling out your tax return. This may include your P60/P45 (If the employment is ongoing/if employment has ended during the tax year), respectively. Documents related to the following are:

• Interest
• Dividends
• Capital gains tax
• Rental income
• Pension income 
• Pension Contributions

Payment Options

Choosing the correct payment method can streamline the process and give you greater control over your tax payments. Select the most suitable approach among these:

• Online Banking (Faster Payments)
• CHAPS (Clearing House Automated Payment System)
• Debit or Corporate Credit Card Online
• At Your Bank or Building Society
• By Cheque Through the Post
• Direct Debit
• Through Your Tax Code
• Pay Weekly or Monthly
• Important Considerations

When to Seek Professional Help for Self-Assessment

If you’re dealing with complex tax issues, such as overseas income, capital gains tax, or inheritance tax, you may seek help from a specialist tax advisor. 

Our accountant team provides confidential advice on tax issues to low-income people. We can help you understand your tax obligations and ensure you claim all the tax relief you’re entitled to.

Knowing about potential scams is essential when seeking help with your tax return. HMRC will never contact you out of the blue asking for personal information or payment. If you receive a suspicious email or phone call, you should report it to HMRC immediately.

Completing your Self-assessment tax return can be daunting, but you don’t have to do it alone. We are here to help you, so don’t hesitate to ask for support if you need it.