Self Assessment Tax Return Service

What are Self Assessment Tax Returns?

Self Assessment Tax Returns are a way for freelancers, self-employed and others to declare how much they have earnt, and thus how much they owe in tax. If your income is already taxed by PAYE, this does not automatically mean you are exempt. HMRC Self Assessment tax returns differ from the Pay As You Earn (PAYE) system in many ways. Under PAYE, tax is deducted automatically from wages, pensions and savings.

You might still have to file a UK tax return to declare any other income earned or claim a tax refund. If you are in any doubt, speak with our team to find out.

The process is intended to be as simple as possible but due to the complexities involved, this is not always the case. For example, some people may be entitled to a tax rebate that they are not aware of, or they may not know how to claim back everything they are owed. There are also deadlines to meet, with penalties for late applications.

If you complete a Self Assessment tax return, you include all your taxable income, and any capital gains. You also claim any tax allowances or reliefs that you are owed on the tax return, so it is worth knowing what you are entitled to.

Who needs to do a self assessment tax return?

It is not only freelancers or the self-employed who need to submit Self Assessment tax returns. You’ll need to file your tax returns if you fall into one of the following categories:

• If you earned £2,514 or more in untaxed income, such as money from renting out a property or savings and investments.
• If your savings or investment income was £10,000 or more before tax
• If you made profits from selling shares, a second home or other chargeable assets and need to pay Capital Gains Tax
• If you were a company director
• If you're a nominated business partner
• If your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit
• If you had income from abroad that you needed to pay tax on foreign income for
• If you lived abroad and had a UK income
• If you got dividends from shares and you’re a higher or additional rate taxpayer
• If your income was over £100,000
• If you were a trustee of a trust or registered pension scheme
• If you had a P800 from HMRC saying you didn’t pay enough tax last year - and you didn’t pay what you owe through your tax code or with a voluntary payment
• If you make a substantial amount of money from selling things online (speak to our team to learn more)

What documents do I need to file a self assessment return?

Filing a Self Assessment tax return means showing HMRC a full picture of your finances, so the more information you have documented, the better. Here are a few examples of important documents which you should hold on to:

• Form P45, if you stopped working for an employer during the tax year.
• Form P60, showing what tax you've paid.
• Form P11D, if you get any "benefits in kind" like a company car.
• Records of any Taxed Award Schemes or redundancy payments.
• Other things to keep track of include extra income such as untaxed tips, incentive payments or benefits like meal vouchers.
• Remember, it's not just the self-employed who file a Self Assessment tax return online. If you're claiming a tax rebate for expenses of over £2,514, you'll need to use the system too.

What are the penalties for missing the deadline?

In the eyes of HMRC, there are no acceptable excuses for failing to submit your Self Assessment tax return in time, even if you do not owe them anything. If you do miss the deadline, you’ll be hit with the following penalties:

• £100 automatic fine for filing even a single day late,
• £900 in penalties can stack up over the next three months
• £3,000 for each year you can’t provide the necessary records

Should you choose to work with Tax2u, we will ensure that all information is submitted on time so that there is no risk of you incurring late penalty fees. This takes the stress out of your hands, and offers you complete peace of mind so you can focus on more important tasks such as running your business.