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How to do your Self Assessment tax return
Business advice

How to do your Self Assessment tax return

21 December 2021

5 min read

As 2022 begins, many of us may have New Year’s resolutions – from living more sustainably to reducing our technology time. And for many business owners, that online Self Assessment tax return deadline in January may be top of the to-do list. So, are you looking to avoid a last minute scramble to submit a tax return? We’ve put together a handy guide on how to do a Self Assessment return.

What is a Self Assessment tax return?

Your Self Assessment tax return is the process by which you inform HMRC about your earnings over the last tax year, and other relevant financial information. This enables HMRC to collect the Income Tax and National Insurance Contributions you owe.

Do I need to do a Self Assessment tax return?

If you operate as a sole trader, business partner or limited company director, it’s likely you will need to submit a Self Assessment tax return in order to pay your Income Tax each year. In contrast, employees with no additional taxable income outside of a payslip won’t usually need to complete a tax return as they are taxed at source under Pay As You Earn (PAYE).

But it’s not simply business owners who need to do an annual Self Assessment return. For example, some people might have a full-time job, but have a side project in selling products online. So, if you get income from any of the following sources, you may need to fill in a Self Assessment form:

  • Self-employed earnings outside of a permanent job.
  • Dividend income.
  • Interest from savings or investments.
  • Capital gains.
  • Income from a grant. Any grants received during the COVID-19 pandemic – such as the Self-Employment Income Support Scheme – are taxable.

When to submit your Self Assessment tax form

You will generally need to pay any outstanding Self Assessment tax bill online by 31st January for the previous tax year. For example, Income Tax due at the end of January 2022 should cover your earnings from 6th April 2020 to 5th April 2021. You can alternatively submit a paper Self Assessment tax return, in which case the deadline for payment is earlier – 31st October in the same calendar year that the tax year ended.

There are other Self Assessment tax deadlines to be aware of. For example, if your tax bill is more than £1,000, you are obliged to make two ‘payments on account’ during the tax year.

What do I need to do a tax return?

If you’re a little apprehensive at the prospect of filling in HMRC tax forms, we hope the following list puts your mind at rest. Here are some helpful bits and pieces to gather before you submit your Self Assessment tax return.

  • Your Unique Taxpayer Reference (UTR) – this is a ten-digit unique identifier for you or your business.
  • A P60 to demonstrate any employment income, or a P45 if you left employment within the relevant tax year – read more about these forms before you submit your tax return to HMRC.
  • Your National Insurance number.
  • Details of additional income such as self employed income, pensions, dividends and rental income.
  • Your expenses as evidenced through your bookkeeping.
  • Any charitable donations that could entitle you to tax relief.

How to do a Self Assessment return online

According to HMRC figures for 2020, 96% of Self Assessment customers completed their tax return online. Here is how you can follow suit in three simple steps.

1. Register for Self Assessment

If you’re filling in a Self Assessment return for the first time, you will need to register for Self Assessment and Class 2 National Insurance. You will then receive a UTR in the post, which you will need to submit a tax return.

2. File your return online

The next step is to file your tax return online through your Government Gateway account – you can do this as soon as the tax year has ended. You can alternatively get an accountant or someone else you trust to do this on your behalf if you give them authorisation using a 64-8 form. Once you’ve filed your return and you’re happy to proceed, you can submit the SA100 form to HMRC.

3. Pay your Self Assessment tax bill

Once you’ve submitted your return online, you can view your bill in your Government Gateway account – this may take up to 72 hours to appear as part of your tax calculation. You can also view your tax calculation before you submit, giving you an indication of how much tax you can expect to pay. Finally, you can pay your Self Assessment tax online in a number of ways, as we’ll explore.

Ways to pay your Self Assessment tax

Once you know how much Income Tax you owe, here are some of the ways you can pay HMRC:

You can read more on GOV.UK about the ways you can structure your Self Assessment payments, and how long each type of payment will take to process.

Read our small business tax guides

Submitting a tax return might not be as fun as running a coffee shop or building relationships with loyal customers, but knowing your business rates from your bookkeeping could help you stay on top of things. For more inspiration, read some of our Tyl Talks tax guides:

Disclaimer

This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.

Tyl by NatWest makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.

Tyl by NatWest accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

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