Introduction:
Tax season can often feel overwhelming, especially for freelancers, self-employed individuals, and small business owners. In the United Kingdom, the self assessment tax return system is in place to ensure everyone pays the correct amount of tax on their income. In this blog post, we will explore what a self assessment tax return is, who needs to complete it, and why it is important.
What is a Self Assessment Tax Return?
A self assessment tax return is an annual declaration of your income, expenses, and any tax owed to Her Majesty’s Revenue and Customs (HMRC). It enables the government to calculate your income tax liability accurately. Unlike employees who have their tax deducted through Pay As You Earn (PAYE), self-employed individuals and those with additional income sources must complete a self assessment tax return.
Who Needs to Complete a Self Assessment Tax Return?
There are several circumstances that may require you to complete a self assessment tax return. These can include, but are not limited to:
1. Self-employment: If you work for yourself, provide freelance services or operate a business, you are typically required to complete a tax return.
2. High-income earners: Individuals earning over £100,000 per year must file a self assessment tax return, even if they are not self-employed.
3. Multiple income streams: If you have income from multiple sources, such as rent, investments, or foreign income exceeding certain thresholds, you will need to complete a tax return.
4. Directors of limited companies: Directors are generally required to complete self assessment tax returns for any income not taxed through PAYE.
5. Complex tax affairs: If you have a more intricate financial situation, including capital gains, trust income, or higher rate tax relief claims, a self assessment tax return is necessary.
Key Deadlines for Self Assessment Tax Returns:
To ensure you meet your obligations and avoid penalties, it is vital to keep track of the following important deadlines:
– Registering for self assessment: If you’re self-employed for the first time, you should register by 5th October following the end of the tax year (for example, by October 5th, 2022, for the tax year ending April 5th, 2022).
– Filing paper tax returns: The deadline for filing a paper self assessment tax return is October 31st following the tax year. However, this method is slowly being phased out and will be unavailable in the coming years.
– Filing online tax returns: The deadline for filing self assessment tax returns online is January 31st following the tax year, which allows individuals to file and pay any tax owed electronically.
– Payment deadlines: Tax payments must be made by January 31st; this includes any tax owed from the previous tax year and the first payment on account towards the current tax year (if applicable). The second payment on account, if needed, is due by July 31st.
Let us help you:
Dealing with your own self assessment can be a difficult and often stressful process. Claim Your Tax are here to make that process efficient and stress free. Not only can we process your self assessment and keep HMRC happy for you, but we can help save you time, money and even look at reclaiming any overpaid taxes.
If you are Self Employed or Freelance, have a second income stream or are a high earner, we can handle all accounts for you, often in under 48 hours!
For just £149, Claim Your Tax takes care of all of this for you, leaving you with one less thing to worry about, so you can focus on your business.
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