Self assessment is a system whereby HMRC gives every person who is required to fill in a tax return the responsibility of preparing their annual accounts, either themselves or using a tax professional, and then submitting those accounts to HMRC, either online or by paper. Based on the figures that you have submitted and the questions that you have answered while filling out the return, the system will tell you at the end of the process how much tax you have to pay or, in some cases, how much will be repaid back to you.
Not everyone is required to fill in a tax return. In fact, most people do not have to. Only those people who, in the last tax year (6 April 2018 to 5 April 2019):
If you are in any doubt, you can check here: https://www.gov.uk/check-if-you-need-tax-return
In the case of the tax year 2018/2019, the following deadlines apply:
|Register for Self Assessment||5 October 2019|
|Paper Tax Returns||Midnight 31 October 2019|
|Online Tax Returns||Midnight 31 January 2020|
|Pay the Tax You Owe||Midnight 31 January 2020|
In the case of the tax year 2018/19, if you did not register by 5 October 2019, you could get a penalty. It is always advisable to do it on time. However, if you missed the deadline, you still have to register, and if you register, file the return and pay your tax on time, then HMRC may decide to reduce your late notification penalty to zero. On the other hand, if you miss the deadline of filing your return or paying on time, you will definitely get a penalty. The penalty is £100 if it is 3 months late, and you will have to pay more if it is later. You will also be charged interest on late payments.
You can appeal against a penalty if you have a reasonable excuse, which would have to be something like the death of a partner or a relative, a life-threatening illness, an unexpected admission to hospital, fire, flood, system failure while preparing the online return etc.
HMRC will not accept excuses like reliance on another person to file on your behalf who failed to do it, finding the online form difficult to deal with or a cheque bouncing etc.
There are different ways of doing this, depending on your own circumstances.
If you are self employed and have not previously sent a return, you need to register online here. You will be sent a letter with a 10-digit unique tax reference, and your account for the online service will be set up.
If you are self employed and have previously sent a return, you need to reregister online using form WCF1 here. You will need your unique tax reference, which you can find on letters sent previously by HMRC. If you can’t find it, then contact the HMRC self-assessment helpline.
If you are not self employed but need to fill in a tax return due to receiving other income, then you will have to register for self assessment using online form SA1 here. You will receive the unique tax reference, and depending on whether you have sent a return previously, you might be able to use an existing account, or you might need to create a new online account.
If you are a partner, you need to register for self assessment using form SA401 online here or by post.
Apart from personal details, like name, business name if one exists (or your name if not), address, unique tax reference, national insurance number, date of birth, marital status, etc., you need to have prepared the final accounts of your business or had them prepared on your behalf by this stage of filing your return, and you should also have to hand the details of all other sources of income you have received during the tax year 2018/2019.
For example, if you were employed, self employed and had a rental income from a property all at the same time, in order to fill in the tax return, you will need to have your P60 to hand, showing the payment you received from your employment and the taxes you paid. If you were employed in more than one place, you will need a P60 from every employer, an annual account or income and expenditure account for your self-employment business, and also another account for your rental-income business.
SA100 form is the official name for the Self Assessment Tax Return form. You can decide whether you want to do this online or by paper. Filing online is easier, quicker and saves you a lot of time and money by not having to print pages and pages of the return and its supplementary pages, depending on your situation. In addition, you get 3 more months to file the return online, as the deadline for filing by paper is 31 October, whereas online it is 31 January the following year.
The return consists of 2 sections: the main section and the supplementary pages. The main section deals with:
The other sections are the supplementary pages, which you have to fill in if you have other incomes, such as from self employment, capital gains etc. These supplementary pages are:
In addition to these, there are many more sources of income, which you can find the supplementary pages for here.
You have a year from the deadline of your current tax year to make changes to your tax return due to an error. So, if the deadline for the current tax year 2018/19 is 31 January 2020, you have until 31 January 2021 to amend your tax return. If you miss that deadline, you will need to write to HMRC.
The method of updating your tax return depends on how you filed it in the first place. If you filed online, then you will need to sign in to your online account. From ‘Tax Accounts’ you should choose ‘Self-Assessment Account’ (if you do not see this, skip this step), then select ‘More Self-Assessment Details’. Choose ‘At a Glance’ from the left-hand menu, then select ‘Tax Return Options’. Choose the tax year you want to amend, go into the tax return, make the corrections and file it again.
If, however, you filed by paper, then you will need to download and print the new tax return. Make sure you only send the corrected pages, writing on the top of each page “amendment”, and include your name and your unique tax reference number.
In simple terms, if your tax bill for one year is over £1000, you will not only pay what is due for the tax year 2018/19 by 31 January 2020, but also half of what your tax bill might be for 2019/20. So, let’s say your tax bill is £2000 for 2018/19, you will have to pay £3000 by 31 January 2020; £2000 towards your bill for 2018/19 and £1000 as the first payment on account towards your 2019/20 tax bill. The second payment on account will be 31/07/2020 for another £1000, and if there is any remaining balance for 2019/2020, you will pay it by 31 January 2021. This will continue until your tax bill for one year is less than £1000.
There are several ways to do this, the details of which you can find here.