Self-Assessment
What is a Self-Assessment?
A self-assessment is also known as a Tax Return. This is the annual declaration of earnings made by an individual, to HMRC. Tax returns are issued to all those whom HMRC are aware need a return including all those who are self-employed or company directors.
When is the self-assessment due?
The Self-Assessment is due any time after 6th April each year, and must be filed by 31st January in the following year. Any tax liabilities must also be paid by 31st January, otherwise penalties will apply. Individuals who want HMRC to calculate tax liabilities must have their return filed by 31st October. Returns can be filed electronically on the HMRC website.
Who needs to submit a self-assessment?
The UK income tax system requires the payer of key sources of income to deduct tax at source which removes the need for many tax payers to submit a tax return or make additional payments. This applies in particular to employment and savings income and dividends. However this is not possible for contractors who are self-employed, or if someone with investment income is a higher rate tax payer.
When can I calculate self-assessment?
The taxpayer does have the option to ask HMRC to compute their tax liability in advance of the tax being due in which case the return must be completed and filed by 31 October following the financial year. This is also the statutory deadline for making a return where you require HMRC to collect any underpayment of tax, up to £2,000 generally, through your tax code.
Will I need to pay anything else?
You may have to pay a ‘balancing payment’ for the previous tax year. This may include any tax you owe historically and any interest due on late payments and penalties your limited company may have incurred. The balancing payment will take account of any payments you’ve already made. You’ll have to make the balancing payment by 31st January after the end of the tax year.
