Self Assessment – The definitive guide to filing your tax return

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What questions do you have about your tax return?

Does it even apply to you?

What’s the secret to getting the entire experience over with quickly?

We’ve put together the definitive guide to filing your tax return on time.

It might not be fun, but if you’re self-employed then it’s got to be done. You may even find you’re due a refund!

• What is Self Assessment?
• Does it apply to me?
• Before getting started
• What do I need to fill in?
• When is the tax return deadline?
• How can I send it?
• On completing your tax return…
• Tips and tricks

What is Self Assessment?

Self Assessment is a system for working out and paying tax on your income, operated by HMRC (HM Revenue & Customs – formerly known as the Inland Revenue). You only need to do a Self Assessment form if you do not pay tax on your salary through PAYE. Self Assessment tax return forms are issued every April, covering the previous 12 months (i.e. the tax year to 5 April just passed).

Does it apply to me?

If you only have one job, and no income from anywhere else, you’ll probably never need to fill out one of these forms. HMRC will usually send you a tax return form automatically (or a ‘notice to complete a return’ if you normally file electronically) if you’re required to complete one. However, if you realise you do need one and they haven’t cottoned on, it’s your responsibility to ask for it.

There are several reasons why Self Assessment may apply to you. Here are the main ones:

• You’re self-employed
• You’re a company director
• You’re a minister of religion
• You have income from letting any property or land you own
• You receive other untaxed income, or significant capital gains, and the tax due on it cannot be collected through a PAYE tax code
• You’re a member of Lloyd’s of London insurance and reinsurance market
• You receive annual income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income
• You have taxable foreign income, even if you’re claiming that you are not normally resident in the UK.

For many people, their first brush with Self Assessment will be when they become self-employed. If you’re about to take that step, this guide from GOV.UK should point you in the right direction. Alternatively check out our article on managing your finances as a freelancer.

Before getting started

It’s advisable to gather all the paperwork you will need before you begin. Getting three-quarters of the way through the form only to discover that you’ve lost a crucial bit of data is guaranteed to try your patience.

And apart from anything else, if you’re required to fill in a tax return (online or on paper), keeping your paperwork up to date is actually a legal requirement.

Everyone must keep records of their income (and any capital gains) for at least 22 months after the end of the tax year.

And if you’re in business and are self-employed as a sole trader or a partner, or have rental income, you need to keep the records for at least five years and 10 months after the end of the tax year.

So, what will you need to hand? A comprehensive list of required documentation can be found here, but here’s a quick breakdown:

• Your P60
• Details of any pay and taxable expenses and benefits received from your employer
• Bank and building society statements
• Cheque and paying-in book stubs
• Any dividend vouchers you have
• Your self-employment accounts
• Documentation about any capital gains that have been realised
• Information on other income including investments, savings, pensions, property or benefits you receive
• Paperwork on anything you can claim for, like self-employed expenses or charitable donations.

You don’t normally need to send any documents with your Self Assessment form. If, subsequently, HMRC do ask to see any documents, make sure you keep a photocopy.

If there’s something you need to send, make a photocopy and keep the original document in a safe place for future reference.

You should now be ready to fill in those all-important forms.

What do I need to fill in?

Every HMRC Self Assessment pack includes the core tax return SA100 form. On top on this, the chances are you’ll have to fill in one or more additional sections.

The extra pages you’ll need to complete will depend on your circumstances. For example, self-employed status, capital gains and rental income all require different extra forms to be completed, so fill in those that apply to you and ignore the rest.

HMRC will usually send you the forms that are relevant to you. You’ll also receive the HMRC guide to filling in your tax return (also  here). It goes through the questions step by step.

However, if they don’t send you all the right bits, you can print missing forms from the HMRC website, or call the Self Assessment orderline on 0845 9000 404.

If you need help filling anything in, call HMRC’s Self Assessment helpline on 0845 9000 444. It’s open Monday to Friday from 8am to 8pm and on Saturdays from 8am to 4pm. They also provide general advice on Self Assessment.

If any of your personal details change, or if you find that you or the tax office have made a mistake, let HMRC know as soon as possible.

You can only be penalised if your return is incorrect through carelessness or you’re deliberately misstating the figures. You can be criminally convicted if you try to cheat the tax system.

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When is the tax return deadline?

The tax year starts on 6 April and lasts until 5 April the following year. In April you’ll also receive your tax return papers. The deadline varies depending on how you plan on filing your return:

• If you’re sending your completed papers back by post, your deadline is 31 October
• If you’re completing an online tax return, you have until 31 January the following year
• Any tax owing must be paid by 31 January (many Self Assessment taxpayers also have to make payments on account by 31 January and 31 July).

If you miss the deadline by just one day you could face a £100 penalty, regardless of whether you have no taxes to pay or have paid the tax you owe. If you don’t settle your bill immediately, you’ll also start paying further penalties and interest charges. Surcharges – effectively penalties – can apply if you’re significantly late. But if you pay all your tax on time, that can eliminate any late-filing penalty.

These are just a few of the good reasons not to leave your tax return until the last minute. If you do, there will also be no time to correct any mistakes, or to ask for help if you run into problems. Get started early; it’ll mean much less hassle for you in the long run.

How can I send it?

By post

If you want to send your forms by snail mail, remember that the deadline is 31 October, so allow plenty of time.

Double-check that you’ve signed and dated everything, and that you’ve included all additional pages.

And finally, remember to take a photocopy of the whole thing, in case it gets lost in the post. HMRC won’t acknowledge receipt, although it will let you know when your form’s been processed.

If you get your paper returns to HMRC by 31 October, they can calculate your tax for you.

They’ll also let you know the amount you need to pay by the following 31 January, and if you owe less than £2,000, they may be able to collect the money through your tax code rather than as one lump sum.

Online

The advantages of completing the form online are clear:

Firstly, there’s no hassle with paperwork and no danger of it getting ‘lost in the post’.

You also buy yourself an extra three months, with a 31 January deadline.

You receive an immediate acknowledgement, so you know it’s arrived safely, and you can save the form as you go along so you don’t have to complete it all in one sitting.

The HMRC software will automatically calculate your tax for you, and if you are owed any money by HMRC, you’re more likely to get it sooner because your form should be processed quicker!

To file your return in this way, you’ll need to register online and request an ‘activation PIN’ from the HMRC website. To do this, you’ll need your Unique Taxpayer Reference (UTR), which you’ll find on form SA100 of your tax return, and your National Insurance Number or postcode.

It can take up to a week to receive your account password and become fully registered, so don’t wait until the last minute!

For information on how to do it, check out the HMRC website.

Once you’ve completed your form, just make sure you print a copy off or save one on your computer, so you can still refer back to it if necessary.

On completing your tax return…

Make sure you’ve included all the relevant pages. Once you’ve done this, send it off and wait for it to be processed to see if you owe money or are owed money.

Now you can sit back, relax, and enjoy a cuppa knowing your tax return is done and out of the way for this year.

If, however, you are finding the process less forgiving and are pulling your hair out trying to get to grips with all of those figures, get a professional to help.

The Chartered Institute of Taxation (CIOT) and the Institute of Chartered Accountants of Scotland (ICAS) have online directories of certified number crunchers. Look for someone who specialises in your area – if, for example, you’re a freelancer, you need an accountant who specialises in advising freelancers. Ask around for recommendations – particularly those working in the same kind of industry as you.

Tips and tricks

Jane Moore, from the Institute of Chartered Accountants, has a few ideas to help you along the way:

• Make sure you SIGN your tax return on the last page!
• If you want to complete your tax return online by 31 January, you need to register online to use the service, so you must do this as soon as possible here.
• Only fill in the boxes that apply, don’t write ‘nil’ or ‘0’. If they don’t apply, leave them blank.
• You don’t have to send any of your records/papers with the tax return, but you must keep them for two years after the end of the tax year. For some income, like letting out your property, you have to keep the records for at least six years.
• Make sure you claim any tax relief under the supplementary pages. For example, you can get relief on Gift Aid donations.
• Don’t be put off by claiming if you don’t have exact amounts. You can give estimates based on what you think you spend, or use receipts from half of the year to calculate the whole year’s estimates. For example, if you buy stationery every month and believe you spend about £20 on it that would be reasonable – anything outrageous may be investigated by the tax office.
• If you’re waiting for information which may have a bearing on your assessment, you can put your tax return in on a provisional basis including a note stating that this is the latest information and you will send the final figures through when you can.
• The extra two pages are there for notes. If anything new and varied from your last tax return has happened, explain it in your notes. HMRC uses risk assessment software to see who they should investigate, so if your income was half that of the previous year, just explain it in a note and they may be satisfied.

Useful links and contacts

• HMRC Self Assessment guide
• HMRC Self Assessment Helpline: 0845 9000 444
• Top tips for avoiding tax
• For a slightly more cheery look at tax, check out our tax fun page.