Things About Self-Assessment Tax Return You Need to Know

Accounting practices offering their services to self-employed clients will find this guide beneficial because self-assessment tax returns are real for them. Getting it right in the first place is very important; otherwise, it creates unnecessary problems for you and your client. So, let’s delve into the nitty gritty of self-assessment tax returns.

What is Self-Assessment?

Taxes owed by salaried people in the UK are deducted automatically from their salaries via PAYE (Pay as you Earn) before they get it in their hands. However, for your self-employed clients, the HMRC will not know how much tax you owe, so you will need to inform them. For this reason, self-assessment is done.

Every self-employed person or person who receives any other income must submit a self-assessment tax return online every year. The information provided in the tax return will be used to calculate the overall tax bill and determine whether you need a refund.

Who Needs to File a Self-Assessment?

There is a wide range of people who are required to do self-assessment tax returns, including:

• Self-employed and earning more than £1,000
• If you are a partner in a business partnership
• Taxable income is more than £150,000
• Had to pay capital gain tax when you sold something that had its value increased
• Had to pay the High-Income Child Benefit Charge

Self-assessment is also required if your clients have an untaxed income source such as:

• Income from property rent
• Commissions
• Income for dividends, investments, and savings
• Foreign income

What are the Tax Return Deadlines?

If your client is eligible for a self-assessment then the next step would be to get the full information about deadlines. It is to be noted that the HMRC will receive the tax return or any money you owe before the deadline, for last year the tax year started from 6^th April 2023 to 5^th April 2024.

If your clients have not done self-assessment before, then it is required that you inform the HMRC by 5^th October. The job of informing HMRC can be done by registering for self-assessment. The deadline for online tax returns is 31^st January 2025 midnight, and the paper tax return will be midnight 31^st October 2024.

The deadline to pay taxes owed is by midnight 31^st January 2025. However. there’s usually a second payment deadline of 31 July if you make advance payments towards your bill (known as ‘payments on account’).

Now, we understand that self-assessment tax returns are complex, and doing them for multiple clients can be time-consuming. Hence, to save time and minimise errors, it would be prudent for you to get tax outsourcing support from reputed service providers such as Corient.

It is also important to note that the above deadline dates are subject to change; for the current dates, please visit the government website.

What Are the Penalties If You Are Late?

Keeping a close watch on the self-assessment tax return and payment of tax deadlines will ensure that you get all the submission deadlines. In case you miss it, your client’s will be subjected to a fine of £100 for up to 3 months delay. The fine will increase if you fail to pay after three months. We understand that the HMRC keeps changing these numbers. That’s why you must click on the self-assessment tax return penalties for the latest numbers.

How to Fill in A Self-Assessment Tax Return

Self-assessed tax returns online are quite beneficial for both HRMC and your clients. That’s why HMRC is aggressively promoting MTD (Make Tax Digital). If your clients have not registered for online tax returns before, you must first register them. The registration might take some time, so it is important to register well in advance so that it does not clash with the tax filing dates.

There are multiple benefits of online self-assessment, including improved accuracy of digital records, the ability to send digital records directly to HMRC, and wider productivity gains for your clients’ businesses.

Once you have registered your client, the HMRC will send a Unique Taxpayer Reference number. Follow the instructions accordingly to finish setting up the account. Once that is done, you can use the HMRC self-assessment tax return online services to submit the tax return.

What You Need to Complete Your Tax Return

To complete a self-assessment tax return successfully, you will require all the paperwork to contain accurate information. These information’s as follows:

• 10-digit Unique Taxpayer Reference (UTR)
• National Insurance Number
• P11D or P9D, which shows any benefits and expenses
• Summary of any rental income and expenses
• Savings and investment statements showing how much you have earned in interest and other income like dividends
• Documents detailing your self-employment income, including receipts, bank statements and accounts
• Documents showing any contributions to charities or pensions that might be eligible for tax relief

Conclusion

Self-assessment of tax returns is an important task that your client expects you to do flawlessly, so we understand the pressure on you. The online self-assessment by HMRC via MTD has made filing easy. For accounting practices like yours, managing multiple clients and self-assessments simultaneously can lead to complications. In addition to time consumption, this can cause filing errors, leading to penalties and legal issues for clients. All this will cause damage to your reputation.

However, it can be avoided by getting tax outsourcing support from Corient. Our accountants are well-versed in the UK’s accounting standards and HMRC regulations. Our professional and dependable accounting services will certainly reduce your workload and boost your productivity. For more information about our services or to share your requirements in detail, please do contact us via our website.