Because the UK has the world’s longest tax system, even the most basic tax return can be difficult to prepare. Taxpayers must be aware of a number of deadlines and responsibilities. This article explains the basics of Self Assessment, which is a method of paying taxes by submitting an annual tax return to HMRC.
What is Self Assessment?
HM Revenue and Customs (HMRC) uses the Self Assessment system to collect income tax. Wages, pensions, and savings are typically taxed automatically. Other income (including COVID-19 grants and support payments) must be reported on a tax return by individuals and businesses. If you must file a tax return, do it after the end of the tax year (5 April) to which it relates.
Sending your return
You can either file your tax return online or via mail.
Before the deadline, submit your tax return. Allow extra time (up to 20 working days) if you did not submit an online return last year because you will need to register first. You can register in a variety of ways if you’re:
- A sole trader or self-employed
- Not self-employed
- Registering a partnership or registering a partner.
Filling in your return
You must keep records (such as bank statements or receipts) in order to correctly fill out your tax return. You can seek assistance with completing your tax return.
Paying your bill
Paying your bill By the 31st of January, you must have paid your Self Assessment bill. The amount of tax you pay is determined by your tax band. If you need to pay Capital Gains Tax, such as when you sell shares or a second house, there is a different rate.
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Who is required to send a tax return?
If you were the following during the previous tax year (6 April to 5 April), you must file a tax return:
- Those who work as a ‘sole trader’ and earned more than £1,000 per month (before taking off anything you can claim tax relief on)
- A business partner’s partner.
If your only source of income is wages or a pension, you won’t need to file a return. However, if you have any additional untaxed income, you may be required to send one, such as:
- Certain grant or support payments for COVID-19
- Money earned from the rental of a home
- Commissions and tips
- Savings, investments, and dividends are all sources of income.
- Foreign earnings.
Other reasons for sending a return
You have the option of submitting a tax return to:
- Make a claim for some tax relief
- To claim Tax-Free Childcare or Maternity Allowance, for example, you must demonstrate that you are self-employed.
If you are eligible for Child Benefit
You may be required to file a return and pay the High-Income Child Benefit Charge if your income (or that of your partner, if you have one) exceeded £50,000.
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Can I submit my own tax return?
If you did not file a tax return the previous year, you must register. You can register in a variety of ways if you’re:
- Self-employed or a sole trader
- Not self-employed
- Registering a partnership or registering a partner.
If you’re new to Self Assessment, you’ll need to preserve records (such as bank statements or receipts) in order to properly fill out your tax return.
Sending your return
You can send your tax return online, or utilize commercial software or paper forms, once you’ve registered. Then you must pay your bill by the due date. You can seek assistance with completing your tax return.
Using commercial software or paper forms
You can use commercial software or paper forms to send a return. Returns must be sent using one of the following methods:
- for a partnership
- for trust and estate
- if you get income from a trust
- if you lived abroad as a non-resident
- if you’re a Lloyd’s underwriter
- if you’re a religious minister
- to record earnings earned from the sale or disposal of several assets (‘chargeable gains’)
Paper forms must be submitted by October 31 (or January 31 if you are a trustee of a registered pension scheme or a non-resident company).
What is the deadline for 2021 tax return?
By the deadline, HM Revenue and Customs (HMRC) must have received your tax return and any money you owe.
|Register for Self Assessment if you’re self-employed or a sole trader, not self-employed, or registering a partner or partnership||5 October 2021|
|Paper tax returns||Midnight 31 October 2021|
|Online tax returns||Midnight 31 January 2022|
|Pay the tax you owe||Midnight 31 January 2022|
If you make advance payments toward your bill (known as ‘payments on account,’ you normally have a second payment deadline of July 31. If you’re late, you’ll almost always be penalized. If you have a reasonable excuse, you can appeal a penalty.
When there is a different deadline
If you want HMRC to automatically collect the tax you owe from your wages and pension, you must submit your online return by December 30. You must be eligible. If you’re a trustee of a registered pension scheme or a non-resident corporation, you must file a paper tax return with HMRC by 31 January. You can’t send a return through the internet.
If you have a company as a partner, you will get a return on your investment. If one of your partners is a limited company and your partnership’s accounting date is between 1 February and 5 April, the deadline for:
- The deadline for filing online returns is 12 months after the accounting date.
- The deadline for paper returns is 9 months after the accounting date.
What is the penalty for failure to file a tax return?
If you need to send a tax return and miss the date for submitting it or paying your bill, you’ll be penalized. If your tax return is up to three months late, you’ll be charged a £100 late filing penalty. If you pay your tax bill late or later, you’ll have to pay more. Late payments will incur interest charges. Calculate your penalty for late Self Assessment tax returns and payments that are more than three months late. If you have a reasonable excuse, you can appeal a penalty.
What if I made a mistake on my tax return?
You can make changes to your tax return after it has been submitted, such as if you made a mistake. You must make your changes by the following deadlines:
- For the 2019-2020 tax year, the deadline is January 31, 2022
- For the tax year 2020-2021, the deadline is January 31, 2023.
You must write to HMRC if you miss the deadline or need to make changes to your return for any other tax year. Your bill will be adjusted based on the information you provide. It’s possible that you’ll have to pay more tax or that you’ll be able to get a refund.
Updating your tax return
The way you choose to revise your tax return is determined by how you submitted it.
Online tax returns
- Use your Government Gateway user ID and password to log in.
- Select ‘Self Assessment account’ from ‘Your tax account’ (if you do not see this, skip this step).
- Select ‘More Self-Assessment Details’ from the drop-down menu.
- From the left-hand menu, select ‘At a glance.’
- Select ‘Tax return options from the drop-down menu.
- Select the tax year for the return you’d like to change.
- Make the necessary changes to the tax return and refile it.
Paper tax returns
Fill up a new tax return and send the revised pages to HMRC. On each page, write ‘amendment’ and include your name and Unique Taxpayer Reference (UTR), which can be found on past tax returns or HMRC letters. The address can be found on your Self-Assessment form. If you can’t find it, email your corrections to the general Self-Assessment questions address.
If you used commercial software
If you need help with your tax return, contact the software provider. If your program is unable to make corrections, contact HMRC.
Write to HMRC
If you need to make changes to your tax return from the 2018 to 2019 tax year or earlier, write to HMRC. Include the following in your letter:
- You’re correcting a tax year
- Why do you believe you paid too much or too little tax?
- How much you believe you have been overpaid or underpaid.
You have up to four years from the end of the tax year to claim a refund. If you’re making a claim, provide the following information in your letter:
- That you’re filing an ‘overpayment relief’ claim
- Proof that you paid self-assessment tax during the relevant period
- How you’d like to be repaid
- That you have not attempted to reclaim this refund earlier
- A signed statement stating that the information you’ve provided is accurate and full to the best of your knowledge
Changes to your bill
If you revised your tax return online, you’ll see your adjusted bill right away. Within three days, your statement will additionally include the following information:
- the difference between the old one and the new one, so you can determine if you owe more or less tax
- any interest.
If you are owed tax
To request a refund, proceed to ‘Request a repayment’ in your HMRC online account’s left-hand menu. Allow 4 weeks for your refund to be processed and paid into your bank account.
If you need to pay more tax
Your new bill will also include the following information:
- the payment deadline
- the impact on any account payments you need to make.
HMRC will issue you an updated bill within four weeks if you send an updated paper return. They’ll also pay any refund immediately into your bank account if you provided your bank account information on your tax return.
You can try to visit our blog to get more about The Guide To Tax Credits
How can I get help with my tax return?
If you request help with Self-Assessment, you may:
- Appoint someone to complete and submit your tax return, such as an accountant, a friend, or a relative – you may discover a UK-accredited accountant here.
- Participate in webinars and watch videos
- For general Self Assessment questions, contact HM Revenue and Customs (HMRC).
- Get help with your online account
How do I file a tax return for a deceased person?
If you’re dealing with the tax affairs of someone who has died, you must notify HM Revenue and Customs (HMRC) as soon as possible. If you need to file a Self Assessment tax return on behalf of the deceased, HMRC will let you know. If you do, they’ll give you a return form as well as instructions in a letter.
Filling out the tax return for self-assessment
Depending on the circumstances, you’ll require different records for the deceased’s tax return. You’ll typically need information on the deceased’s bank and savings accounts, such as:
- Bank statements
- Building society passbooks
- Dividend vouchers
- National Savings bonds or certificates.
If the deceased was employed or received a pension, you’ll normally need to gather the following information:
- work or pension payslips
- any expenses paid by the employer
- confirmation of any pension from the state.
If the dead had a business or rented out the property, you’ll need their business records.
Sending the return
Post your completed Self-Assessment form. The return must be received by HMRC by the deadline specified in the letter that came with the form. You can employ a professional (such as an accountant) to assist you in filing the deceased’s tax return.
Providing HMRC with information regarding the ‘administration period’
You may also need to transmit information to HMRC for the ‘administration period’ if you’re the executor or administrator of an estate. This is the period of time between when a person passes and when the estate is resolved (‘distributed’). The amount you must send is determined by the size of the estate and the funds received during the administration period.
We can analyze your self-assessment tax return to see if any tax savings can be made and to see if there are any anomalies that need to be resolved before the return is submitted as part of the above service. This procedure minimizes the possibility of an HM Revenue and Customs investigation into your tax problems. If you’re having trouble keeping up with your tax payments, we can look into delaying them or negotiating a payment plan with HM Revenue and Customs on your behalf.
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