A Self Assessment tax return can look very daunting, but if you’re prepared, organised and understand what you’ll be asked for they’re a lot simpler than they look. In this guide you’ll find out if and when you need to fill one in, when you need to register, what sections you’ll need to fill out, what expenses you can claim and how to pay your final tax bill.
Do I need to fill in a Self Assessment tax return?
- your self-employment income was more than £1,000
- your income from renting out property was more than £2,500 (you will need to contact HMRC if it was between £1,000 and £2,500)
- you earned more than £2,500 in untaxed income, for example from tips or commission.
- your income from savings or investments was £10,000 or more before tax.
- you need to pay Capital Gains Tax on profits from selling things like shares or a second home.
- you’re a director of a company (unless it was a non-profit organisation, such as a charity)
- you, or your partner’s, income was over £50,000 and you’re claiming Child Benefit
- you have income from abroad you need to pay tax on, or you live abroad but have an income in the UK.
- your taxable income was over £100,000
- you earn over £46,351 and make pension contributions you may have to complete an assessment to claim back the extra tax relief you’re owed
- you are a trustee of a trust or registered pension scheme
- your State Pension was more than your personal allowance and was your only source of income
- you received a P800 from HMRC saying you did not pay enough tax last year.
You can also fill in a Self Assessment tax return if you want to make voluntary Class 2 National Insurance Contributions (NICs) to help you qualify for benefits such as the State Pension.
You do not need to fill in a Self Assessment tax return if you’re an employee who has paid tax through the Pay As You Earn (PAYE) system, unless you earnt over £100,000.
How to register for a Self Assessment tax return?
If you’ve never submitted a return before, you will first need to register for Self Assessment. There are different ways to register if you’re self-employed, not self-employed but need to declare income, or if you’re in a partnership.
Once you have registered, you will be sent your Unique Taxpayer Reference (UTR).
If you want to submit your Self Assessment form online, you will then need to set up a Government Gateway account. To do this, follow the instructions in the letter containing your UTR.
Once you’ve set-up the account you will get an activation code in the post, which you need to complete the set-up of your Gateway account.
If you have submitted Self Assessment tax returns before, you will need your old UTR to register and set up the account.
It’s best to make sure you can access you Gateway account before you try and submit your Self Assessment to save time if for any reason you can’t log in.
What are the Self Assessment deadlines?
You submit tax returns for tax years, not calendar years, and you do this in arrears.
For example, for the 2017/18 tax year, running 6 April 2017 to 5 April 2018, you would:
- need to register for Self Assessment by 5 October 2018 if you’ve never submitted a return before
- submit your return by midnight 31 October 2018 if filing a paper tax return
- submit your return by midnight 31 January 2019 if filing online
- pay the tax you owe by midnight 31 January 2019.
If you fail to meet one or more of these deadlines, you might be charged a penalty fee.
What information will I need to fill in a Self Assessment tax return?
If you’ve never filled in a self-assessment tax return before, it can look very daunting. However, once you understand the process, it’s relatively simple, as long as you have all the information you need.
Before you start, make sure you have:
- your 10-digit Unique Taxpayer Reference (UTR)
- your National Insurance number
- details of your untaxed income from the tax year, including income from self-employment, dividends and interest on shares
- records of any expenses relating to self-employment
- any contributions to charity or pensions which might be eligible for tax relief
- P60 or other records showing how much income you received which you’ve already paid tax on.
It’s also a good idea to read the relevant HMRC helpsheets, particularly on the extra sections, or supplementary pages, relating to why you’re filling in the Self Assessment tax return.
If you’re filling in your Self Assessment form online, you can also find helpful online by clicking the ‘?’ next to the different fields.
How to fill in a Self Assessment tax return
Did you know
From January 2018, information about money earned through PAYE will be auto-populated in your online Self Assessment tax return. Plans are in place to auto-populate pension contributions and savings income as well.
There are two sections to a Self Assessment tax return. The main section is the SA100, which deals with:
- taxed and untaxed income in the form of dividends and interest
- pension contributions
- charitable donations
- benefits, including State Pension, Child Benefit and Blind Person’s Allowance.
If you have income to declare as a company director, a foreign national (or dual resident), from self-employment, property, Capital Gains, or from abroad, you will also need to fill in a supplementary page.
You do not have to fill in the short-form tax return (SA200), unless you are sent it by HMRC.
How to fill in the main tax return (SA100)
Before you start filling in the SA100 or the supplementary pages, it is important to read the helpsheets and notes related to the section you’re completing.
This section is specifically for declaring tax and untaxed income from interest earned from bank and building society accounts and dividends from shares.
Pensions, annuities and state benefits
If you’re retired, you need to enter the:
- total amount of State Pension you were entitled to receive over the tax year
- gross amount of any State Pension lump sum
- gross amount of any annuities or pension lump sums (other than State Pension).
If you’re claiming benefits, you will need to enter the:
- amount received in Incapacity benefit and Jobseeker’s Allowance
- grand total of taxable benefits received including Bereavement Allowance, Carer’s Allowance and Industrial Death Benefit.
You do not need to include Attendance Allowance, lump sum Bereavement Support Payment, Personal Independence Payment (PIP), Pension Credit, Working Tax Credit, Child Tax Credit, income-related Employment Support Allowance, Maternity Allowance, or War Widow’s Pension. These benefits are not taxable.
Other UK income
This section is for any other taxable income, not related to interest, dividends or on the supplementary pages.
You can also enter any allowable expenses related to this income, and any income tax you’ve already paid on it.
Any payments into a registered pension scheme, annuity contract, or employer’s scheme where deductions were made after tax.
Grand totals of Gift Aid donations made to charities during the tax year. You can also enter amounts for any shares, securities, land or buildings gifted to charities.
Blind Person’s Allowance
Confirm whether or not you are claiming Blind Person’s Allowance.
Student loan repayments
Confirm whether or not you’re currently repaying your Student Loan and deductions made by your employer.
High income Child Benefit charge
You only need to fill in this section if you’re receiving Child Benefit and your income was over £50,000.
Complete this section if your income for the tax year was less than the Personal Allowance and you wish to transfer some of your Personal Allowance to your spouse.
How to complete the supplementary pages of a Self Assessment tax return?
If you have extra income to declare from self-employment, property or capital gains, you will need to fill in a supplementary page. If you’re:
- self-employed you need to complete SA103
- reporting property income, fill in SA105
- declaring capital gains, complete SA108.
In these pages, you will need to report income from these sources which you’ve not paid tax on.
You will also get to declare any allowable expenses which will be deducted from your tax bill.
If you’re earning money through self-employment, you will be asked to enter your turnover under the business income section.
This is the grand total of everything you had coming in during the tax year before expenses are deducted.
If you have more than one source of self-employed income, you can enter this amount separately, but make sure the job which you earn the most from is your main employment.
There are two ways to declare your expenses if you’re self-employed.
You cannot claim expenses if you claim the £1,000 tax-free trading allowance.
If annual turnover is below £85,000 you can just enter your total expenses without having to itemise them. If you’re self-employed and your turnover is more than £85,000, you will have to enter an individual amount for each kind of expenses, plus a total at the end.
The different expenses you can include if you’re self-employed are:
- cost of stock bought for resale
- cost of equipment used at work
- wages, salaries and other staff costs
- payments to subcontractors (if you work in the construction industry)
- vehicle and travel expenses
- work building costs (including rent, power and insurance)
- repairs and maintenance for work buildings and vehicles
- office costs (including internet access, phones and stationery)
- advertising and business entertainment costs
- interest on loans
- bank, credit card and other financial charges
- accountancy, legal and other professional costs
You do not need to send in proof of your expenses, like receipts, when you submit your Self Assessment tax return. You will need to keep records of expenses for five years after you submit your return for that tax year in case HMRC ask you to produce them.
UK property income (SA105)
If you’re a landlord, you will be asked to enter the income from rented properties in two separate sections.
In the first section, you will need to enter the total income from all furnished holiday lettings in the UK. If you have any furnished holiday lettings in the European Economic Area (EEA), you will need to enter the total income from these on a separate page.
In the second section, enter the total rent and income from other properties.
You cannot claim expenses if you claim the £1,000 tax-free trading allowance.
If you make money from renting out a property you can claim expenses for:
- rates, insurance and ground rent
- property repairs and maintenance
- loan interest and other financial costs
- legal, management and other professional fees.
Capital Gains (SA108)
Income which you need to declare for Capital Gains Tax is called ‘disposal proceeds’.
You will need to fill in a separate ‘disposal proceeds’ total for residential property, non-residential property and shares and securities.
On a Capital Gains Tax return, you can claim for ‘allowable costs’. These include:
- the price paid to buy the asset in the first place
- costs of any improvements (must be reflected in the asset when it’s sold*)
- other costs in buying or selling the asset (such as Stamp Duty when buying a property).
*What this means is, the improvement still needs to be present when the asset is sold. For example, you can’t claim for a new carpet in a house, if you remove the carpet before you sell the property.
It’s important to keep good records to make sure you don’t claim for the same thing twice. This is because you might be claiming expenses as part of your Self Assessment tax return for property in previous years.
For example, if you claimed for maintenance on a Buy to Let property in a previous tax year, you cannot claim for the same expense as part of your Capital Gains tax return when you come to sell the property.
Paying your Self Assessment tax bill
Once you’ve submitted your Self Assessment tax return, you will be told how much tax and, if you’re self-employed, National Insurance Contributions (NICs) you will need to pay.
When do you need to pay?
The deadline for payment is 31 January.
Can I pay my tax bill in instalments?
Yes, you can make payments in instalments, but these are an advance on your next tax bill.
You can arrange for what is called a budget payment plan through your online account and decide how much you want to pay each week or month. You can also choose to stop paying for up to six months.
The only restriction is you must be up to date with your previous Self Assessment payments.
However, you cannot use this to pay for a previous tax bill in instalments.
How do I pay my tax bill?
There are many ways to pay your Self Assessment tax bill, but the length of time depends on which method you choose. If you’re making your payment close to the deadline day, you should choose one of the faster options to make sure you don’t get penalised.
Online or telephone banking, Clearing House Automated Payment System (CHAPS), debit or corporate credit card and in person at your bank or building society, are the fastest ways to pay.
But, you can arrange for a bank transfer, Direct Debit or send a cheque.
What if I miss the deadline?
If you miss the deadline to register, submit your return or pay your bill you will get a penalty.
If you’re up to 3 months late filing or paying tax there is a penalty of £100. If it’s later than this the penalty will be more. If you have a reasonable excuse you can appeal.
What if I make a mistake?
You do not need to fill in your Self Assessment tax return all in one go, so it’s a good idea to start early and take your time to minimise mistakes.
Before you officially submit you will be given the chance to go over your return and correct any errors you have made.
If you realise you’ve made a mistake after you’ve submitted you can still make changes up until the filing deadline the year after. This means, for the tax return you submitted by 31 January 2018, you can make changes up until 31 January 2019.
Payment on account
Unless your last Self Assessment tax bill was less than £1,000 or you’ve already paid more than 80% of all the tax you owe, you will be asked to make ‘payments on account’ towards your next tax bill.
‘Payments on account’ are made up of two payments, each of which is half of your previous year’s tax bill, and are due by 31 January and 31 July.
For example, if your tax bill for 2015/16 was £1,500, during the 2016/17 tax year you will make two payments on account of £750 each. When you come to submit your 2016/17 tax return, these two payments are deducted from your tax bill.
So, if your 2016/17 tax bill was £3,000, £1,500 (two payments on account) will be deducted and you will have to pay £1,500 as a balancing payment, plus an extra £1,500 as your first payment on account for the 2017/18 tax year.
If your tax bill is less, HMRC will send you a refund. If you know your tax bill will be lower, you can contact HMRC and ask for a reduction on your payments on account.
What if you can’t afford to pay your tax bill?
If you can’t afford to pay your tax bill, you need to contact HMRC as soon as possible by calling the Business Payment Support Service on 0300 200 3825. This line is for everyone, not just for businesses.
HRMC will look at how much you owe, your income, expenditure, assets, savings and investments and decide whether or not you will be given more time to pay.
If you don’t pay on time, it’s likely you will have to pay interest and penalty charges.
You might be offered more time to pay or offered the chance to pay in instalments.
Tax is a priority debt, so if you can’t, or are struggling to pay your tax bill, it’s vital to take action straight away and call the Business Payment Support Service.
If you don’t and simply refuse to pay, HMRC will take enforcement action against you. This can include directly collecting what you owe through your earnings, bank account, pension, or through repossession, or a debt collection agency.
You could also be faced with court action, risk being made bankrupt or having your business closed down.