What are self-assessment tax returns?
Self-Assessment is a system used by HM Revenue and Customs (HMRC) to collect income tax and National Insurance from individuals who have varied sources of income and who are not on PAYE.
Who needs to file tax return?
A tax return must be submitted if during the previous tax year (April 6th to April 5th) you were:
- A partner in a business partnership
- Self-employed as a ‘sole trader’ and earned over £1,000 before deductions
- If you are an individual who earns over £100,000 annually
- If you paid into a personal pension and are a higher rate taxpayer
If you have received untaxed income from the following:
- Foreign Income
- Income from savings, investments, and dividends over and above the respective allowances
- Income from renting out a property
When is it due to be filed?
Tax returns are due to be filed by the 31st of October for paper submissions and the 31st of January when making online submissions.
When is the payment of tax due?
The payment towards your income tax liability is due by the 31st of January following the end of the respective tax year.
Please be aware that if your total tax liability exceeds £1,000 you will be required to make payments on account towards next year’s tax liability on the assumption that it will remain the same. These payments would be due by the 31st of January and the 31st of July and each payment will equal half the previous year’s tax amount.
For example, if in the 2020-2021 tax year your tax liability was £5,000 you would be required to make the first payment on account of £2,500 on the 31st of January 2022 and then another payment of £2,500 on the 31st of July 2022.
If you would like some assistance in completing & submitting your self-assessment tax return then please get in touch – 01273 441 187