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[16.08.2018]

Getting ready for self-assessment

At this time of year, the 31 January deadline for self-assessment can seem like a distant future.

With plenty of time before your tax return is due, it could be tempting to put off any thought of it for the time being.

But as the months go by, the last thing you’ll want after celebrating Christmas and the New Year is to come back to a pile of paperwork and a rapidly approaching deadline.

This last-minute panic can be avoided with some well-timed forward planning, and by getting ahead on your tax return as early as possible.

Who needs to complete self-assessment?

Anyone with income of more than £1,000 from self-employment in 2017/18 will need to complete and submit a self-assessment tax return – but this isn’t the only reason you might be included.

For example, you’ll need to send a return if you earn more than £2,500 in rental or other untaxed income, or if you earn £10,000 or more from savings, investments or dividends.

There are various other reasons you may need to file a self-assessment return for the last tax year, including:

  • if you sold assets and need to pay capital gains tax on the profits
  • if your income, or your partner’s income, was over £50,000 and one of you claimed child benefit
  • if you lived abroad and had a UK income
  • if you had income from abroad that you needed to pay tax on
  • if your taxable income was over £100,000
  • if you were a trustee of a trust or registered pension scheme.

This list doesn’t cover every reason you may have to file a return, so talk to us if you’re not sure.

What do you need to do?

1) Keep records

If you’re new to self-assessment, you’ll need to keep records throughout the year so you can fill in your details correctly.

This includes receipts from sales, business expenses or income, as well as PAYE records if you’re employing people. If your business is registered for VAT, you’ll also need to keep VAT records.

These need to be accurate, complete and readable, as HMRC may ask for the documents if they need to check your tax return.

2) Register

If you didn’t send a tax return last year, you’ll need to register for self-assessment.

You’ll need to do this in different ways depending on whether you’re self-employed, or if you’re registering a partnership.

This should be done by 5 October 2018 if you need to file a tax return for 2017/18.

3) Send the return

After you’ve registered, you’ll need to decide whether you’re going to use software or paper forms to file the return.

Most people now complete self-assessment online, with 93% of returns filed online for the 2016/17 tax year.

For 2017/18, the filing deadline will be 31 October 2018 if you’re using paper forms, or 31 January 2019 for online returns.

You must also pay the tax you owe by 31 January 2019.

What are the penalties for late filing?

You could face a penalty of £100 if your return is up to 3 months late.

There could be higher charges if it’s later or if you miss the deadline for your tax bill.

Speak to us

We can take the burden of tax returns off your shoulders, as well as providing friendly support and advice on a range of tax issues.

Contact us to talk about how we can help with self-assessment, or give us a call on 020 8643 1166.

Dick Haffenden