If you are a higher rate tax payer or have income from other sources, you’ll probably need to file a Self Assessment Tax Return for the tax year 6th April – 5th April.
The purpose of Self Assessment is to declare to HMRC all income for a tax year to ensure the right amount of tax is paid. If income has been received that tax has yet to be paid on, for example tax due on dividends, HMRC will collect the tax due via Self Assessment. It is therefore important to be aware of Self Assessment so that money can be put to one side ready to pay HMRC.
Who needs to file a Self Assessment Tax Return?
There are a number of reasons why an individual would need to file a return for a tax year. These include but are not limited to:
- Self employment or Partnership income
- Income over £150,000 in a tax year
- Income over £50,000 and child benefit received into the household
- Income from property or land of more than £2,500
- Other income that hasn’t been taxed and is more than £2,500
- Dividend or savings income of more than £10,000
- Need to pay Capital Gains Tax or report losses
- Income from overseas
- Lived or worked abroad and had UK income
HMRC have a tool to help confirm if a tax return needs to be filed. Simply complete their online questionnaire to check.
While you may not need to complete a Self Assessment tax return if you have had a small amount of untaxed income (see above), you must still inform HMRC if you received:
- More than £500 in dividend income (£1,000 for the 2023/24 tax year)
- Between £1,000 and £2,500 in any other untaxed income such as rental income
HMRC letter – Notice to complete a tax return
When an individual is registered for Self Assessment, HMRC will send a ‘notice to complete a tax return’ as a reminder. These are normally sent shortly after 5th April when the tax year has ended.
If HMRC do not send a notice to complete a tax return, please get in contact and we can check for you – all we will need is your UTR number.
If your personal details are not up to date at HMRC then you may not receive important correspondence. If you let us know your UTR number we can check your address records are correct with HMRC.
Registering for Self Assessment
When an individual identifies a reason for filing a Self Assessment Tax Return, they must tell HMRC. This is done by completing either an online HMRC form or by downloading and posting a completed SA1 form to HMRC.
It takes HMRC up to 6 weeks to issue an individual with a UTR number. As soon as it arrives, please forward it to your account manager so we can assist with questions and the filing of returns.
Finding your UTR number
An individual Unique Taxpayer Reference (UTR) will have been issued by HM Revenue & Customs if you have completed a SATR in the past. The UTR is made up of ten digits, e.g. 12345 67890 and can be found on a previously filed tax return, a Notice to complete a tax return or on a Statement of Account. Note that an individual UTR number is different to a Company UTR number.
What we need to complete a Self Assessment Tax Return
Information about an individuals income from your company is normally within the records in our software. There may however be income from other sources that we don’t have which will be required to complete a Self Assessment Tax Return. Examples are:
- Interest and dividends received, other than those for your limited company
- Pension income received
- Rental Income
- Capital Gains or Losses
- Payments into Personal Pension Schemes
- Donations to Charity
- P45s, P60s and P11D from previous employments in the tax year
- Student Loan deductions or requirement to repay a Student Loan
- Any other information which you consider may be required for your Return
We can help prepare and file personal tax returns – simply complete the questionnaire on your dashboard. Don’t forget, to receive the early filing discount on our fees for preparing and filing Self Assessment Tax Returns, your completed homepage questionnaire and any supporting information needs to be with us before 31st October following the tax year end.
Filing and payment deadlines
If you’d like our help with your Self Assessment Tax Returns you can complete the questionnaire on your dashboard that will be displayed after 6th April. We recommend that you complete this as soon as possible after 6th April as due to the numbers we must complete, we do so on a first come first served basis.
The deadline for filing Self Assessment Tax Returns online and making payments is midnight 31st January. We begin work on them as soon as the tax year starts on the 6th April and we recommend filing your tax return as early as possible so you can understand if you owe further tax or if you are due a refund.
Even if your tax return is filed as early as April, you don’t have to make the payment immediately unless it is overdue. The deadlines for paying Self Assessment taxes are:
- 31st January – for any tax you owe for the previous tax year (known as a balancing payment) and your first ‘Payment on account’
- 31 July – for your second ‘Payment on account’
Payments on account
Payments on account are advance payments towards the tax bill you will owe for that tax year. It is calculated by looking at your previous year’s tax bill, if this was over £1,000 your payment is automatically calculated and payable in two separate instalments.
The first payment is due on 31st January, the same day as your balancing payment which clears your tax bill for the previous year. The second is due on 31st July. This is designed to help you spread your payments into two more manageable lump sums.
Each instalment is normally 50% of your previous year’s tax bill. For example, if you paid £4,000 in tax for the 2022/23 tax year, you would need to make a Payment on account of £2,000 by 31st January 2024 and the second payment of £2,000 by 31st July 2024.
Unfortunately, this is not a voluntary payment. However, it can be reduced if you think your income will be lower in the current tax year. Please be aware, if you reduce your payment below the amount that actually becomes payable once your 2023 self-assessment return has been completed there will be interest, and potentially penalties, charged on the underpaid amount.
Once your 2023/24 Self Assessment Tax Return is submitted, if the actual amount of tax due is less than the payments on account made then the difference will be refunded by HMRC. If the payments on account are less than the total tax due, the balancing amount will be payable by 31st January 2025.
Making payments to HMRC
You’ll need to make sure HMRC receive your payment before their deadline to avoid any interest. They will also apply a late payment penalty of 5% of the tax due if it remains unpaid by 2nd March. There are different ways to pay HMRC and the time you need to allow for your payment to reach them depends on your payment method.
One of the quickest and safest ways to pay is by using online banking. All you’ll need is to know how much to pay and your individual UTR number. You can find this information in your Self Assessment Tax Return and SA302 tax calculation.
The SA302 is helpful when making payments as it shows the total due by the deadlines and your UTR number. When making a payment using online banking you’ll need give an 11 digit payment reference which is your UTR number followed by the letter ‘K’.
If we filed your return, you’ll find copies of your Self Assessment Tax Return and SA302 in your filestore.
Penalties for late filing
HMRC allow almost 10 months from the tax year end to file Self Assessment Tax Returns (not that we recommend leaving it that late!).
As soon the return is one day late, HMRC automatically issue their first penalty and continue with additional penalties until the return is filed.
| Overdue by | Penalty | Notes |
| 1 day | £100 | This applies even if there is no tax to pay or if the tax due has been paid but the return has not been filed |
| 3 months | £10 for each following day | Up to a 90 day maximum of £900. This is in addition to the fixed penalty above |
| 6 months | £300 or 5% of the tax due, whichever is the higher | This is in addition to the penalties above |
| 12 months | £300 or 5% of the tax due, whichever is the higher | In serious cases they may apply a penalty of up to 100% of the tax due |