If you are self-employed, a freelancer, or have more than one source of income, you must file your yearly self assessment tax return with HMRC. This is true even for employed individuals, where HMRC may require you to file a tax return to ensure your tax affairs are in order.

Doing a self assessment for the first time might feel a little daunting at first. Even when done annually, you may find certain elements of the filing process difficult. All it takes is a little preparation and understanding of the process to make things quicker, easier, and less of a chore. With the right knowledge of tools available to you, you can easily file your self assessment tax return online and ensure your tax obligations with HMRC are square.

What Is a Self Assessment?

The process of self-assessment involves disclosing your income for that year as well as other financial information to HMRC. This will allow HMRC to calculate the amount of tax and/or National Insurance (NI) you owe.

Self assessment, otherwise popularly known as 'filing your tax return', is usually done online. Despite the term 'self-assessment', you do not have to do it yourself. You can hire a chartered accountant London to do it for you. An accountant is likely to know the technicalities behind filing tax returns, thereby minimising the amount of tax you owe.

Who Needs to Submit a Self-Assessment Tax Return?

Your income tax is normally deducted at source, so usually you don't need to file a self-assessment tax return if your salary is paid through a PAYE payroll system or if you get pension income.

Here are some instances of people who typically do have to carry out self-assessment tax returns, UK (although this isn't an exhaustive list).

  • Anyone earning a certain amount from investments (including property)
  • Anyone who receives a P800 form (this comes from HMRC and explains that you didn’t pay enough tax)
  • Ministers of religion
  • Partners and directors of limited companies
  • People who continue to work to earn income while receiving a pension
  • People who have earned more than a particular amount and are claiming child benefits
  • People with more than one job
  • Self-employed individuals

When Do I Need to Submit My Self-Assessment Tax Form?

The deadline for submitting your online self assessment tax return form is 31January. In order to ensure that you have the money available to pay the tax that is due, you should try to finish it at least a few days ahead of time, if not before. This is also the date by which your tax payment is due.

Nonetheless, you can submit your tax return at any time after the end of the tax year (5 April). However, if you get into the habit of doing it early, you can just forget about it for the rest of the year. If you are sending your tax return through the post to HMRC, the self assessment tax return deadline is no later than 31 October. 

The only way the UK tax return deadline might be changed is if HMRC sends you a notification instructing you to file your taxes online after 31 October, 2023. If so, you have three months from the date of notice to file your tax return.

How to Register for Self-Assessment?

Before submitting a self-assessment tax form, you must register if you did not submit one for the prior tax year. The deadline for registration is 5 October (after the end of the tax year).

Upon registering for self-assessment, you will get an activation code and a Unique Taxpayer Reference (UTR) number via mail to set up your account. It is advisable that you register as soon as possible because this process may take up to 20 working days.

How Can I Pay The Tax on My Self-Assessment?

HMRC will determine how much tax you owe them when you file your tax return. You may view your tax bill by logging into your account on the government website, which is what they will send you. Self-assessment bills can be paid online using debit cards; credit cards are not accepted. Mail-order cheques are also accepted.

If you are employed, you can use your tax code to pay your bills, pay taxes through PAYE, or owe less than £3,000 through self-assessment. You can submit your form online by December 30 or on paper by 31 October.

This will increase the amount you pay through PAYE each month, spreading the cost of the self-assessment over a year. If you're eligible, it will be automatically initiated unless you indicate in your tax return that you would want to make a lump sum payment.

You can see if HMRC has received your payment in your online account, or you can ask for a receipt if you pay by cheque.

What Happens if I Fail to File My Self Assessment on Time?

The following penalties may apply if your tax return is not filed on time:

  • There is a penalty, even if you pay your taxes one day after the self-assessment deadline.
  • If you make your payment more than three months after the tax self-assessment deadline, you risk a fine of up to £1,000.
  • If you fail to pay your taxes within a six to twelve-month window, you can be required to pay an additional £300 on top of your previous fines. In some cases, you may be fined 5% of your tax bill, which can be more expensive.
  • If your payment was received more than a year after the due date, a further £300 fine, or 5% of your tax liability, plus any additional penalties, will apply. In more serious situations, in addition to your initial tax bill, you may be penalised 100% of the taxes you owe.

How Can Unicorn Accountants Help You?

If you have a simple financial situation and can handle your finances, self assessment tax return is easy to complete. The process can be time-consuming, though, and if you're unsure of all the expenses and allowances you qualify for, you could end up paying more tax than required.

In the worst-case scenario, you may make mistakes that lead to a fine, which is why it’s wise to hire expert tax accountants like Unicorn Accountants to handle your tax returns, especially if your finances are more complex. It will take a lot of time to become well-versed in tax return procedures.

Alternatively, you can collaborate with us and be confident that all of your tax obligations will be fulfilled without any problems.