Do I Need to Do a Self-Assessment for Tax Purposes?

Self Assessment is a system used by HM Revenue and Customs (HMRC) to collect Income Tax. Tax is mostly deducted automatically from wages and pensions, but people or businesses with other incomes must report it in a tax return.

You may have to pay a penalty or interest if you don’t file, and you will have to pay on time. When HMRC asks you to send a return, you have to do so. Do you want someone reliable to do your self-assessment taxes or cater to other financial needs? Contact our professional accountants and Chartered Accountants at Precision Accountants.

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Who Is Eligible for Filing Self-Assessment Taxes?

Filling a self-assessment tax is necessary to avoid a fine. You will need to fill out a self-assessment tax return if:

  • You are self-employed, a sole trader or a partner in a business.
  • You are the director of a limited company.
  • You have income from investment, savings or property.
  • You earn above a certain amount from foreign.
  • You receive income from trusts or estates.
  • You receive child benefits.
  • You have income over a certain amount.
  • You have capital gains tax to pay.
  • You have earned tips or commissions.

Feeling confused? Let our advisors help you; call us on 01732 387 059.

Registering And Sending A Return

You must register yourself for Self-Assessment by 5 October 2024 if you have to send a tax return and you have not sent one before. If you have registered for Self-Assessment before but did not send a tax return last year, you should register yourself again.

You should send your self-assessment on time before the deadline to avoid fines. The last tax year started on 6 April 2023 and ended on 5 April 2024. You must tell HMRC by 5 October if you need to complete a tax return and have not sent one before.

If you are doing a paper tax return, you must submit it by midnight 31 October 2024. If you are doing an online tax return, you must submit it by midnight 31 January 2025.

There are different procedures and different deadlines for individuals, partnership firms and corporates.

Penalty

You will have to fill in the penalty if you need to send a return, or you have missed the deadline for submitting your tax. You will pay a late filing penalty of £100 if your tax return is up to 3 months late. You will have to pay more if it’s later than three months. You will be charged interest on your late payments.

If you have reasonable and valid proof for missing out on tax filing, then you may appeal against the penalty. All partners can be charged if partnership tax is filed late.

Tax Return Obligation

There are various duties of the taxpayer, some of which are mentioned below:

1. Registration For Self-Assessment

You should have a Unique Taxpayer Reference number, which is required for filing your returns. If it falls under the self-assessment category, then timely registration is required with HMRC for a smooth tax return process. Follow all the rules and regulations formed by HMRC.

2. Record Keeping

You should maintain a proper record of all your expenses and income. This includes your invoices, bank statements, receipts, and mileage logs if you have vehicle claims. Bookkeeping is very crucial. We can help you in managing and keeping records for you and can also fill out your taxes. A well maintained record can help you in filing taxes easily and ensure that you have the right amount.

3. Paying Your Tax

You should be transparent and clean while calculating your taxes and ensure that your complete amount is submitted to HMRC before the last date. If your tax bill is over a certain amount and less than 80% of your tax is collected at source, you will need to make payments on account. Pay your taxes before the deadline.

4. Using Digital Tools

Under the Making Tax Digital Initiative for Income tax, if you have business or property income over £10,000 per year, then you are required to keep digital records. Not just keeping, but you also have to use software to update HMRC quarterly. Instead of an annual tax return, you have to now do it more frequently.

How We Can Help You?

As professional accountants, we see a lot of people who try to handle their own accounts and come unstuck. That’s where we step in to take away this burden and catch and rectify any errors that have been made. This includes errors that are beneficial to the client, such as reclaiming any tax that has been overpaid by mistake.

We offer services in bookkeeping and accountancy. Call us on 01732 387 059 or send us an email .

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Conclusion

Self-assessment tax is essential for ensuring compliance with HMRC regulations. Understand who should file the tax and what the deadline is for filing taxes. If you are punctual and transparent while filing taxes, you can avoid penalties and be worry free about your taxes. If you feel confused, take the help of professionals.