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What is self assessment?

If you are an employee, then you pay your income tax through the Pay As You Earn (PAYE) system. If you are self employed or have other income sources (such as rent paid to you from a tenant), then you pay income tax using the self assessment system. This system is used by individual taxpayers and businesses.

Why are we hearing about self assessment tax returns now?

There are a lot of articles about self assessment tax returns at the moment because the deadline for filing your self assessment tax return online is the 31st January.

A self assessment tax return is the way you declare the type and amount of income you have made in the preceding tax year. So, on 31st January 2019, you must send your information about the financial between April 2017 and April 2018.  You can submit your tax return at any point after the end of the financial year, you don’t have to wait until January.

What happens if you miss HMRC’s deadline?

If you miss the self assessment tax return filing date, there is an automatic first penalty of £100. Then you accumulate other fines as more time elapses.

  • £10 per day for the first three months late. Maximum of £900
  • The greater of £300 or 5% of your bill up to six months late, this is repeated at 12 months after the deadline.
  • There separate fines for paying your tax bill late, 5% of your bill payable after 30 days, six months and 12 months.

How do I know if I need to submit a self assessment tax return?

People in any of the following financial circumstances, between 6th April 2017 and 5th April 2018, need to submit a self assessment tax return:

  • You earned more than £50,000 and you (or your partner) claimed child benefit.
  • You earned over £1,000 from self employed work.
  • Your earnings from savings, shares, dividends or investments were more than £10,000
  • Rent from property, or other income, made you more than £2,500. This includes things like commission and tips.
  • You were a trustee.
  • You paid capital gains tax.
  • Your taxable income was over £100,000.
  • Your state pension was your only source of income and was more than your Personal Allowance amount.
  • You owe HMRC tax from the previous tax year and you didn’t settle this through voluntary payments or in your tax code.
  • You were living abroad and had income from the UK.
  • You lived in the UK and have income from abroad.

Where can I get help with my self assessment tax return?

HMRC has a helpline that is open on weekdays from 8am to 8pm, Saturday 8am to 4pm, and Sunday 9am to 5pm. The number is 0300 200 3310. There are a variety of online videos and guidance to submitting your self assessment tax return. You can also get in touch with an accountant or tax professional to help you through the process. There is also more free information in Tax Banana’s self assessment section. 

January 6th, 2019|Self Assessment, Uncategorised|

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