Individual Self Assessment Tax Return Preparation and Advice

Do I need an accountant to complete my self assessment tax return?

If your tax affairs are relatively straightforward and you are familiar with figures and financial matters, you may feel quite comfortable completing and submitting your own return.

On the other hand, using an accountant may not be as expensive as you think. It will save you time and give you peace of mind. We will check the figures entered your tax return and then go through them with you so that you can ensure everything is complete. We will file your return for you and advise you of how much tax you need to pay and when.

If your self-assessment tax return includes capital gains, rental income, trading income or partnership profits an accountant is usually advisable. You need to be sure that any deductions and reliefs you are claiming are correct and that you are claiming all the deductions and reliefs you are entitled to.

Mistakes can be costly – both in terms of tax and HMRC penalties if they do enquire into your return

You can read more about capital gains tax , and the taxation of rental income, sole traders and partnerships on these pages on our website.

If you would like a free no obligation meeting to discuss how we can help with your self-assessment tax return just get in touch.

Do I need to complete a self assessment tax return?

HMRC may send you a ‘notice’ to complete a self-assessment tax return. It is also your responsibility to tell HMRC if your circumstances change and as a result you need to complete a tax return.

You need to notify HMRC by 05th October following the year in which a tax return is required (The tax year is from 6 April to 5 April). HMRC have a useful tool that you can use to work out if you need to complete a return and that will take you through the registration process

Some of the most common reasons for needing to complete a self-assessment tax return are

  • You had income from self-employment (sole trader)  (or from a partnership).
  • You had rental income from letting properties.
  • You are the director of a company.
  • Your income from savings or investments was £10,000 or more before tax.
  • Your income from dividends from shares was £10,000 or more before tax.
  • You have income from overseas.
  • You made profits from selling things like shares or a second home and need to pay Capital Gains Tax.
  • Your income (or your partner’s) was over £50,000 and one of you claimed Child Benefit.
  • Your taxable income was over £100,000.

You also need to send a tax return if you:

  • need to prove you’re self-employed, for example to claim Tax-Free Childcare
  • want to make voluntary Class 2 National Insurance payments to help you qualify for benefits

What are the deadlines for filing a self assessment tax return?

The deadlines for submitting paper tax returns is 31st October following the end of the tax year. For online returns it is 31st January following the end of the tax year.

Self assessment late filing penalties

You’ll get a penalty of £100 if your tax return is up to 3 months late. If your return is more then 3 months late you will be charged a daily penalty of £10 for the next 90 days (£900) and further penalties if your return is more than six months late a further penalty is charged of 5% of the tax due or £300 if greater with another penalty at the same rate when the return is twelve months late.

What are the deadlines for paying my self assessment tax bill?

Your self-assessment tax bill is due for payment on 31st January following the end of the tax year. You may also be required to make a payment on account towards your next tax bill.

Payments on account

‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).

You must make two payments on account every year unless:

  • your last Self-Assessment tax bill was less than £1,000
  • you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings

Each payment is half your previous year’s tax bill. Payments are due by midnight on 31 January and 31 July.

If your next self-assessment tax return shows that you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.

If your circumstances change and you estimate that your payments on account are too high and will result in a tax overpayment you can make a claim to reduce them.

Self assessment late payment penalties

HMRC charges interest on tax paid late but they also charge tax geared penalties. The penalties or surcharges are charged when any tax due is 30 days, 6 months and 12 months late and are 5% of the tax outstanding at that date,

If no tax is due the penalties do not apply. They will be charged by HMRC but when you file your return you can appeal, or we can on your behalf.

What to do if you have difficulty paying your tax bill

Call HMRC’s Income Tax helpline straight away if you’re getting close to the deadline and know you can’t pay your tax or you’ve already missed the deadline

Ask to talk about a ‘time to pay agreement’. An agreement will give you either more time to pay, or a schedule to pay your tax in instalments. It’s usually easier to get an agreement before the deadline rather than after you’ve missed it. You might still be able to get one after the deadline, so it’s always worth calling HMRC. You’ll be charged interest for however long it takes you to pay off your income tax debt. This starts from the first day the payment is late.

When you call HMRC about a time to pay agreement, you should be prepared to explain in detail why you can’t pay.

You’ll be asked personal questions about your spending and finances. These will include what you earn and how much your household bills are. Tell HMRC if there are any special circumstances, for example you’ve had a serious illness or one of your customers became insolvent and didn’t pay you.

If you are offered a time to pay agreement you will be able to pay by regular instalments. If you miss an instalment HMRC will cancel the agreement and demand payment in full.

It’s rare to be prosecuted, but HMRC can:

  • take your possessions, including vehicles, to sell at auction (called ‘distraint’)
  • take money directly from your bank account, if your debt is £1,000 or more
  • take court action
  • make you bankrupt, or close down your business

If you would like a free no obligation meeting to discuss how we can help with your self-assessment tax return just get in touch.