We know finance
can be confusing

Self-assessment is a system HMRC uses to collect income tax from self-employed individuals and those who earn more than £1,000. 

If most of your income comes from wages & pension, you will still need to submit a self-assessment return if you have any untaxed income from sources such as:

• Rental properties
• Dividends
• Commission and tips
• Foreign income 

If you’re not sure if you need to complete a self-assessment return, give one of our accountants a call, WhatsApp, email or alternatively, book in for a half hour FREE consultation here (link ‘here’).

If you work for yourself, you are a sole trader which means you are self-employed.

You are most likely self-employed if:

• You sell goods or services to make a profit
• Can decide how, where and when you work
• Hire other people at your own expense to help you in your work
• Provide your own tools and equipment to do your job
• Do not trade as a limited company
• You have set up a limited company and are a shareholder

A UTR number is your ‘unique taxpayer reference’ number. 

HMRC assigns each self-assessment taxpayer a different number in order to track their tax records. All UTR numbers have 10 digits. 

To use ‘Making Tax Digital for Income Tax’, you’ll need to:

• use software that is compatible with Making Tax Digital for Income Tax
• use software to keep digital records
• send quarterly updates for business income and expenses
• submit your end of period statement
• submit a final declaration

This can be a lot of admin work for a busy self-employed individual, so we would recommend getting advice from your accountant.

For tax returns for the year up to April 2024, you will only need to submit one tax return.

From April 2024, Making Tax Digital for Income Tax comes into affect.

Making Tax Digital for Income Tax SA will be introduced from April 2024 for sole traders and landlords. This means you will need to:

• use software that is compatible with Making Tax Digital for Income Tax
• use software to keep digital records
• send quarterly updates for business income and expenses
• submit your end of period statement
• submit a final declaration

Paper tax returns need to be submitted by midnight on 31^st October 2021 for the tax year 2020/21.

Online tax returns need to be submitted by midnight on 31^st January 2022 for the tax year 2020/21.

Your self assessment tax bill needs to be paid by 31^st January 2022. If your Self Assessment tax bill is over £1,000, you may need to make a second payment by 31^st July 2022 as an advance. This is called a ‘payment on account’.

How much tax you pay depends on how much of your income is over your Personal Allowance and how much of it falls within each tax band. 

For the tax year April 2021 to April 2022, the standard personal allowance is £12,570. This can vary depending on Marriage Allowance or Blind Person’s Allowance. It is also lower if your income is over £100,000. 

The tax rate you pay depends on which band your income falls into:

We know people make mistakes! You can make a change to your tax return after you’ve filed it. You’ll need to make your changes by:

• 31 January 2022 for the 2019 to 2020 tax year
• 31 January 2023 for the 2020 to 2021 tax year

If you miss the deadline or if you need to make a change to your return for any other tax year you’ll need to write to HMRC. If you’re our client, we’ll happily to do this for you!

Everyone is different when it comes to paying tax. Contact us to see how we can help lower your tax bills!

You must pay Corporation Tax on profits from doing business as:

• a limited company
• a foreign company with a UK branch or office
• a club or other unincorporated association

If you are self-employed and do not work under a limited company, you do not need to pay for Corporation Tax.

Yes – deferring paying your penalties to HMRC will incur interest charges or your penalty may increase.

If you believe your fine is unfair or you have a reasonable excuse for paying or filing late, we can appeal the fine for you. You’d be surprised how often we are successful in getting our clients penalties cancelled!

As accountants, we understand everyone can get into money problems at some point in life. 

As your accountant, we will contact HMRC for you and see if we can arrange a payment plan. 

Better to pay in instalments, than not pay at all!

Payments on Account are advance payments towards next years tax bill.

You will have to make Payments on Account if your last Self Assessment tax bill was £1,000 or over. Each payment is half your previous year’s tax bill.