Are you ready for self assessment?
Posted on 6th December 2021
If you are self-employed, then the words ‘self’ and ‘assessment’ are two that you would probably rather avoid. Sadly, this is not possible.
Submitting a self assessment is a required process for the self-employed, in which details of your income, gains, and expenses for the previous tax year are provided to HMRC. This can be done by completing a tax return either on paper or online. The amount of income tax due is then calculated and a payment of at least part of that tax is due in January.
You can easily find out if it’s necessary for you to submit a self assessment by using gov.uk’s self assessment checker tool.
When do you need to complete it by?
If you didn’t know already, two key ‘tax related’ dates are on the horizon for those that are self-employed – both falling upon the same day...31st January.
Whilst the deadline for 2020/21 tax returns has already passed for those that complete the paper forms, the deadline for online submission is 31st January. Don’t feel like you need to wait until January to submit online though; you can file any time before this date, with your first payment being due before the 31st January and your second by 31st July.
You will need a Unique Taxpayer Reference (UTR) to submit online, which you will receive once registered at GOV.UK. You will need to register if you did not submit a tax return in the previous year and should already have your UTR if you have previously submitted a tax return. If this is your first self assessment tax return, then it's important to register as soon as possible and not leave it until the January deadline. HMRC provides lots of valuable information, which means that you will know what is expected in advance. You will also need to register for Class 2 National Insurance.
This year it’s also necessary to state if you received any COVID-19 related support. This type of financial aid is taxable, such as grants or payments received under qualifying schemes (during the 2020/21 tax year). Examples of these include:
Self-Employment Income Support Scheme
Coronavirus Job Retention Scheme
Self-isolation payments
Local authority grants
Eat Out to Help Out scheme
It’s important to note that you shouldn't rely on a reminder from HMRC to submit a tax return.
There are substantial penalties for anything that is submitted late or incorrectly, and if the tax isn't paid on time. So, it is crucial that everything is completed and submitted correctly. The good news is that you are not alone. If you are struggling with navigating the process and the above sounds like something you would benefit from support with, Abaqus can help! We can help you get everything in order, to ease any stress that you may be facing. We can also submit the tax return on your behalf, ensuring it is done accurately and on time. We can even provide options that might help if you are worried about paying the tax due! The most important thing to remember is – don’t wait to do it until the last minute!
Simply get in touch to get started.
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