It’s never too soon to think Self Assessment
Self Assessment is an annual task for anyone who isn’t automatically taxed, for instance, if you are self-employed or receive payments from private work as a freelancer or contractor. More than 12 million people are expected to complete a Self Assessment tax return this year.
Whether you are new to Self Assessment or have been completing your tax return for many years, now is the best time to start giving the task some serious consideration.
Preparing your paperwork now can help avoid the unnecessary stress of leaving it until the last minute preventing you from making mistakes or forgetting to include all of your relevant information.
If you’re self-employed and have earned more than £1,000 between 6 April 2021 and 5 April 2022, you will need to file your online tax return by 31 January 2023 or 31 October 2022, for those who submit paper returns.
If this is your first time completing a tax return, you must ensure you leave enough time to register for Self Assessment first via GOV.UK in order to receive your Unique Taxpayer Reference (UTR) and activate your account. Self-employed individuals must also register for Class 2 National Insurance contributions.
By registering early, you’ll be able to access guidance to help you to understand your tax obligations such as record keeping, filing and payments deadlines, and to get an idea of how much you may have to pay when you make your first tax payment to HMRC. Sometimes payments on account are due and you can find out more about that by searching ‘payments on account’ on GOV.UK.
Thousands of people chose to get ahead of the game this year – almost 66,500 taxpayers submitted their tax return on 6 April 2022, the first day they were able to – giving them 9 months to budget before the payment deadline.
Filing early means you know what tax you owe. The sooner you file, the more time you have to plan and make financial arrangements for the tax you need to pay. And it doesn’t mean you have to pay your tax any earlier, you still have until the deadline of 31 January to pay your tax. If you are due a repayment of tax you will be able to claim that back sooner.
Filing early also means you can access a full range of payment options to find the one that suits you best, such as making payments through the HMRC App. It’s simple, convenient, fast and fully secure. To download the free HMRC app, you can visit the App Store from your iPhone or Google Play for Android and follow the download and set up instructions.
For those who are unable to pay their tax bill in full, make sure you access the support and advice that’s available to you. We may be able to help by arranging an affordable payment plan. Visit GOV.UK and search ‘time to pay’.
Remember, if you received coronavirus support scheme payments, including from the Self-Employment Income Support Scheme or Coronavirus Job Retention Scheme, you will need to include details of all the payments you received during the 2021 to 2022 tax year on this year’s tax return.
So, start preparing for your Self Assessment now and leave yourself enough time to get the relevant documents together. Check your information is correct and set aside time to enter your details. The easiest way to file your tax return is online. You can do it at a time that suits you and it doesn’t even have to be completed all in one sitting. You can work around your busy schedule and your business or work commitments by saving your progress in stages and coming back to it again and again.
To find out more visit Self Assessment on GOV.UK.
Still not sure you need to complete a Self Assessment? You can use the online tool on GOV.UK to check if you need to complete a tax return.
Image courtesy of Piqsels