All you need to know about submitting your Self Assessment tax return

Many people don’t like to hear the ‘C’ word mentioned until at least December. However, if you’re self-employed, now’s the time to start thinking about the festive period, particularly with regards to submitting your Self-Assessment tax return (SATR). Here’s all you need to know:

 

What is a SATR?

Self Assessment tax return or SATR is the system by which HM Revenue and Customs (HMRC) collect tax on your income.
Whereas tax is typically deducted automatically from wages, savings and pensions, if you’re self-employed, it’s your responsibility to declare taxable income and to notify HMRC that you need a tax return form. Fail to complete a return when necessary and you’ll receive a penalty.

 

Who needs to complete one?

If you can say yes to one or more of the below criteria for the last tax year (6 April 2017 to 5 April 2018), it’s highly likely you’ll need to complete a SATR:

You were self-employed and your income was over £1,000
You received over £2,500 from renting out property
You’re a partner in a partnership. The Partnership will have to file a return, too
You’re a company director
Your annual income was £100,000 or more
Your annual income was £50,000 or more, and you or your partner was in receipt of child benefit
You received over £2,500 in other untaxed income, such as commission or tips
You needed to claim expenses or reliefs, or you’re a trustee
You had Capital Gains Tax to pay, for instance if you sold shares or a second home
You had £10,000 or more in dividends or from other investments
You had income from abroad you needed to pay tax on

If HMRC send you a return to complete but you find none of the above apply to you, you should get in contact with HMRC as it may be an error.

 

What are the deadlines this year?

You have to submit returns for tax years, not calendar years. Meaning, this return will be to declare tax on income and gains from 6 April 2017 to 5 April 2018. The deadlines for submitting the returns are as follows.

5 October 2018 for registering for Self Assessment if you have never submitted a return before
31 October 2018 for submitting a paper tax return
31 January 2019 for submitting an online tax return (you need to submit your online return by 30 December 2018 if you want HMRC to automatically collect tax owed from your wages and pensions, however you must be eligible)
31 January 2019 for paying all of the tax you owe

 

What are the penalties?

If you need to file a return but it’s up to three months late, you’ll receive a penalty of £100, with this sum increasing the longer you leave it. If a partnership tax return is late, all partners will have to pay a penalty.

 

What if you make a mistake?

If you realise that you’ve made a mistake on your tax return, don’t fret – you’re able to make amendments after you’ve filed it. But the deadlines are as follows:

31 January 2019 for the 2016-17 tax year
31 January 2020 for the 2017-18 tax year

 

Partnering with Intouch

If you’re one of our clients, your dedicated Personal Accountant will have already been in touch to guide you through the process and make sure you know exactly what needs to be submitted.

We offer complimentary completion of a SATR for one employee as part of our comprehensive monthly services for contractors. If you want to find out about the many other features of this plan, or about the benefits of partnering with Intouch, call 01202 375758 today.

 

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.

Understanding the Self-Assessment Tax Return

Understanding the Self-Assessment Tax Return

We don’t like to be a scrooge here at Intouch, but after the Christmas festivities have ended it’ll be time for you to submit your Self-Assessment Tax Return (SATR). After all the Christmas chocolates have gone and the New Year celebrations seem like a distant memory, you will need to take stock from the past tax year and pay what is due to HMRC.

 

It’s a good idea to get on with your SATR as soon as possible so that it’s one less thing to worry about, especially over the festive period. If you are an Intouch client your Personal Accountant will have already been in touch to guide you through this process and make you aware of what needs to be submitted.

 

But if you’re not yet a client of ours and need to understand what the assessment is and if you need to fill one out, read on…

 

What is the Self-Assessment Tax Return?

It’s HMRC’s way of accounting for the incomes that may not all be taxed through permanent employment. Paper self-assessments must have been received by HMRC by the 31st of October and online submissions must be made by January 31st.

 

The assessment itself is a series of questions which all must be filled out. If you’re struggling with the answers, or need advice on claiming for your business expenses, then enlisting the services of a trusted accountant will be one of the best moves you can make.

 

If you have received only PAYE income since April 6th of this year, you may not have to complete an assessment. Exemptions may include if you have received any Child Benefit in your household and one receives an income in excess of £50,000, or if your income has exceeded £100,000 whilst in PAYE.

 

Who has to fill one out?

If you have received non PAYE income then you may need to fill out a Self-Assessment Tax Return. This includes (but is not limited to) the following types of people:

  •  self employed
  • if you are a company director
  • if you have accommodation or land that you receive payment for from tenants (unless covered by the rent-a-room scheme threshold of £4,250)
  • if you receive other income which is not taxed before you receive it
  • if you are subject to paying more tax as a result of Child Benefits and a member of your household is receiving more than £50,000 in income
  • if you are a pensioner who receives a higher amount than your tax-free personal allowances

 

If you’re unsure whether you need to complete a return, take a look at HMRC’s website.

 

What happens if you don’t return your self-assessment or tax due to HMRC?

If you miss the submission deadline for your return and / or tax payment, HMRC will issue you with a fine. The fines range from £100 for the first three months after missing the submission deadline and interest if the tax payment is late, with penalties enforced if more than 30 days late.

 

HMRC do allow you to pay your tax bill throughout the year with the use of their budget payment plan. Your Personal Accountant will be able to advise you on the best way to ensure you retain the correct amount of tax and when it’s due to HMRC.

 

What happens if you make a mistake on your SATR?

Many people make mistakes on their SATR, but it’s worth remembering that HMRC will not accept it if you’ve included incorrect information. If you do make a mistake you’ll have twelve months to correct it (which is called an amendment). However, if HMRC find an error in which they have had to prompt you, there could be a minimum 15% penalty charge on the total tax owed for each mistake that HMRC classes as a careless error. So make sure that you check it, check it again – then check it once more before you submit it!

 

How can Intouch Accounting help?

We ask our clients to submit their assessment details to us by November 30th, so there’s still time to join Intouch and have your self assessment submitted for this year. Please be aware that if you do join us now, there will be a charge for your SATR to be completed, as you have not been a client for the past tax year.

 

Alternatively if you’ve tried to go it alone and seen first hand the amount of time (and potential stress) it can cause, it might be time to look into appointing a contractor accountant.

 

At Intouch we include a personal self assessment tax return as part of our all inclusive monthly fee of £98+VAT. But that’s not all, take a look at our full service inclusions to see just how much we include in our monthly charge with no nasty hidden charges. Ready to join us? Great! Give our team a call on 01202 375 562 to talk through the joining process.

 

Missed our twitter chat with IPSE on the Self-Assessment Tax Return? Catch the full Q&As here.

 

This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.