[vc_row][vc_column][vc_column_text]Completing a self assessment tax return is something many people have to do each year, but it can often feel confusing or stressful. If you are new to the process, the idea of gathering paperwork, working out what you owe, and submitting everything on time can seem overwhelming. The good news is that it does not have to be as difficult as it first appears. With a clear understanding of how self assessment works and what HMRC expects, you can complete your return correctly and avoid unnecessary problems later.
Self assessment matters because it ensures that you pay the correct amount of income tax and National Insurance on any income that is not automatically taxed through an employer. If you work for yourself or receive additional income, the responsibility is on you to report it. Filing on time also protects you from late penalties and interest. Once you know what you need and how the process works, it becomes much more manageable.
What is self assessment
Self assessment is a system used by HM Revenue and Customs to collect income tax from individuals whose tax is not deducted automatically. If you are employed, your tax is usually taken from your wages through PAYE. If you are self employed or receive income from other sources, you must report this to HMRC through a self assessment tax return.
The system covers a wide range of situations. Sole traders report their business income and expenses. Landlords use self assessment to declare rental income. Individuals with savings, dividend income, foreign income or untaxed earnings must also report this to HMRC. Once you submit your return, HMRC calculates how much tax and National Insurance you owe for the tax year. You then make your payment by the deadline.
Who needs to file a self assessment tax return
There are several reasons why HMRC may require you to complete a return. You will usually need to file one if any of the following apply to you.
You are self employed and your income was more than one thousand pounds during the tax year
You are a company director
You earned one hundred thousand pounds or more
You received savings or investment income of more than ten thousand pounds before tax
You earned more than fifty thousand pounds and claimed child benefit
You received income from abroad
You earned two thousand five hundred pounds or more in untaxed income such as rental income
Some people will also need to file a return simply because HMRC sends them one. If you receive a notice to complete a self assessment, you must submit it even if you believe your circumstances do not require one.
Tax return deadlines
Self assessment operates on the basis of tax years rather than calendar years. Each tax year runs from 6 April to 5 April the following year. Once the year ends, you complete and submit your return for that period.
For the 2024 to 2025 tax year, the key deadlines are as follows:
Register for self assessment for the first time by 5 October 2024
Submit a paper tax return by midnight on 31 October 2024
Submit an online tax return by midnight on 31 January 2025
Pay your tax bill by midnight on 31 January 2025
Some people must also make payments on account. These are advance payments towards the next tax bill and usually apply if your tax liability is more than one thousand pounds. The first payment is due on 31 January and the second on 31 July. You can check whether payments on account apply to you by logging in to your personal tax account using your Government Gateway ID.
Penalties for late submission or late payment
Missing the self assessment deadline can be costly. If you file your return late, you will receive an automatic penalty of one hundred pounds. If the return is more than three months late, daily penalties may apply up to a maximum of nine hundred pounds.
There are also penalties for late payment of tax. HMRC charges five per cent of the tax unpaid after thirty days, another five per cent after six months, and an additional five per cent after twelve months. These charges can add up quickly, so it is important to prepare ahead of time and allow yourself enough space to complete your return accurately.
Submitting and paying on time is the simplest way to avoid these extra costs.
How to submit your self assessment tax return
There are two ways to send your tax return to HMRC. You can submit it online using the HMRC Self Assessment service, or you can complete a paper form and send it by post. Most people choose to file online because it is quicker, you receive immediate confirmation, and the deadline is later than the paper deadline.
If you have never filed online before, you will need to register first. The registration process depends on whether you are self employed, not self employed, or part of a partnership. When you register, HMRC will send you a Unique Taxpayer Reference, which is a ten digit number used to identify you for tax purposes. You will also receive instructions for setting up a Government Gateway account. Once your account is set up, you receive an activation code and can begin using the online service.
If you prefer to file by post, you need to download form SA100 from GOV.UK. The form comes with notes that explain how to complete it. Once finished, you must return it to the Self Assessment office by the paper deadline of 31 October.
What you need before you start
To complete your self assessment accurately, you need to gather all relevant documents before you begin. These may include your Unique Taxpayer Reference, your National Insurance number, and records of all income earned during the tax year.
If you are employed, you will need your P60 showing the income and tax already deducted. If you left a job during the tax year, you should include details from your P45. If you received benefits or expenses from an employer, you may need information from a P11D or P9D.
Self employed individuals should collect records of business income, expenses, receipts, invoices, bank statements and accounts. Landlords need details of rental income and allowable expenses. You should also gather savings statements showing interest earned and documents confirming any charitable donations or pension contributions that may be eligible for tax relief.
Good record keeping makes the process much easier and reduces the risk of mistakes.
How to complete the tax return
The main form used for self assessment is the SA100. Depending on your situation, you may need to add supplementary pages covering self employment, property income or capital gains. The online system guides you through each section and only shows you the parts that apply to you.
You will normally enter your personal details first, followed by your income from various sources. The system will ask for information about employment income, pensions, benefits, savings, dividends and any foreign income. If you are self employed, you provide your business income and allowable expenses. If you have rental income, you complete the property section.
You may also need to declare charitable donations, pension contributions, and any allowances that apply to you. Some people use the Blind Persons Allowance or claim relief for specific circumstances.
The key is to enter accurate figures and check everything carefully before you submit the return. Common mistakes include using the wrong tax year, missing income from small savings accounts, or claiming expenses that are not permitted.
Paying your tax bill
Once you have submitted your return, HMRC will tell you how much you owe. You must pay your tax bill by 31 January. Payments can be made by bank transfer using Faster Payments or CHAPS, or by debit card. Credit card payments are no longer accepted. You can also send a cheque through the post or pay at a bank using a paying in slip provided by HMRC.
If you want to spread your payments, you may be able to set up a budget payment plan or arrange a Time to Pay agreement if you are struggling. It is important to contact HMRC early if you think you will have difficulty paying.
If you overpay tax, you can claim a refund through your online account or by contacting HMRC.
Summary
Self assessment can feel like a large task, but with the right preparation it becomes much easier. Understanding what HMRC requires, gathering your documents early, and giving yourself enough time to complete the return will help you avoid penalties and stress. Once you have done it once, the process becomes more familiar each year.
FAQs
Do I always need to file a self assessment
No. You only need to file if your circumstances meet the HMRC criteria. Examples include self employment, rental income, high income, or significant savings income.
What happens if I miss the deadline
You will receive an automatic one hundred pound penalty and may face daily charges if the delay continues. Late payments also attract percentage based penalties.
Can I submit by post
Yes. You can download form SA100 from GOV.UK and send it to HMRC by 31 October. Most people prefer to file online because the deadline is later and the process is quicker.
What expenses can I claim if I am self employed
You can usually claim expenses that relate directly to your business activities such as materials, travel for work, equipment and home office costs. HMRC provides full guidance on allowable expenses.
Where can I get help
You can use the guidance on GOV.UK, speak to HMRC, or seek advice from an accountant if you need support with your return.[/vc_column_text][/vc_column][/vc_row]