Self assessment – who needs to fill in a tax return, and when is it due?

Most normal ’employees’ have tax deducted at source via the PAYE system and are unlikely to have to fill in a tax return unless they receive other income.

When you start a business, you will join the ranks of those that fall under the self assessment tax regime.

Do I need to fill in a tax return?

The following groups of people are required to complete tax returns each year:

  • If you are self employed, that is if you are a sole trader or working in a partnership.
  • If you are a director of a limited company.
  • If you have income from savings, investments, property, or overseas investments.
  • If you have other untaxed income which isn’t collected at source (via PAYE) – such as occasional freelance work, or investment income.
  • If you earn over £100,000 a year.
  • If you earn over £50,000 and you, or your partner, receive Child Benefit.
  • If you need to pay Capital Gains Tax.
  • If you want to claim any tax relief through schemes such as the Enterprise Investment Scheme relief or Venture Capital Trusts.

In addition to these main groups, there are other more select groups such as; pension scheme trustees, and ministers of religion – but we won’t include them all here.

When is my tax return due?

The deadline for both submission of your return, and payment of any tax owed is 31st January. If you’re one of the rapidly shrinking group of people who submit paper returns, you will need to post this back to HMRC by 31st October.

If you have tax to pay, you will also have to make ‘payments in account’ – the same amount as your current tax liability, but payable in advance ‘on account’ for the next tax year – half by 31st January, and the other half by 31st July.

HMRC presumes that you will have a similar tax bill in the following year, although if this is not going to be the case, you can apply to reduce these additional payments.

What paperwork should you get ready before you complete your tax return?

Here are some of the key pieces of paperwork you should dig out before completing your self assessment form:

P60 Form (for employees)

This is your year-end tax certificate of pay, showing the amount of PAYE and National Insurance Contributions deducted during the tax year.

You can read more about the P60, P11D and other key HMRC forms in our handy guide here.

P11D (benefits in kind)

Employers must provide a P11D for all employees who have received taxable benefits of expenses during the previous tax year. A P11D should be completed for all employees earning over £8,500 per year (including company directors).

Bank Statements

These are essential not only to work out how much income you have received in the previous tax year, but also for details of any interest you’re received from your bank. Typically, basic rate tax will already have been deducted before you receive the interest, so bear this in mind when entering your bank interest totals.

Self Employed accounts (if you’re a sole trader)

If you are a sole trader, you should have your accounts to hand.

Untaxed Income

You should obviously keep records of any untaxed income you have received – for example, work done outside your company structure, or if you make supplementary income on an “auction site”. You may also receive income from letting out a property.

If you received child benefit, and either you or your partner earned over £50,000 during the tax year, you will have to pay it back – on a sliding scale – the High Income Child Benefit charge.

Dividends

All dividends are taxed the same way, whether they’re from your own limited company, a publicly-traded company, or unit trust.

Read our guide to dividend tax for more details.

Last updated: 2nd May, 2021

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