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A beginner's guide to self assessment

The deadline for submitting your online self assessment tax return is approaching fast. Here is what you need to know to file your return on time.

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What is self assessment?

It's a way of reporting your income and paying tax to HM Revenue and Customs (HMRC).

If you are employed your income tax is usually automatically deducted from your wages by your employer.

However, if you are self-employed for example, you will need to pay it yourself by completing a tax return.

There are two ways you can submit your tax return:

Tax return deadlines

  • Register: 5th October

  • Paper tax returns: Midnight 31st October

  • Online tax returns: Midnight 31st January

  • Pay your tax bill: Midnight 31st January

  • 2nd payment on account bill: 31st July

Who needs to file a self assessment?

You will probably have to file a tax return if you:

  • Are self-employed

  • Are a company director

  • Earn £100,000 or more a year

  • Have savings or investment income of more than £10,000 before tax

  • Receive income from abroad

  • Are the highest earner in a family claiming child benefit, if you earn over £50,000

  • Earned £2,500 or more in untaxed income, e.g. renting out a property

If you have received self assessment forms from HMRC through the post then you will need to complete and submit them, or complete your tax return online.

You can find out exactly who needs to complete a self assessment tax return on the GOV.UK website.

Tax return deadlines

When you have to send your tax return back, depends on how you complete it:

  • Register: 5th October

  • Paper tax returns: Midnight 31st October

  • Online tax returns: Midnight 31st January

  • Pay your tax bill: Midnight 31st January

  • 2nd payment on account bill: 31st July

If you make advance payments towards your tax bill (known as ‘payments on account’) you also need to be aware of a second payment deadline on the 31st of July. 

To check if this applies to you, log into your personal tax account using your Government Gateway ID and you can view your latest self-assessment return. Doing so will enable you to see when your next deadline is and how much is due towards the bill. 

What are the penalties if you are late?

If you miss the deadline for submitting your self assessment tax return or paying your bill, you will be charged a penalty of £100.

If it is more than three months late, you could be charged an extra £10 a day up to a maximum of £900. You can estimate your penalty using this GOV.UK calculator if you have submitted your tax return late.

How to submit your tax return

Online applications

If you have not sent an online tax return before, you need to register with GOV.UK first. This can take up to 20 days, so make sure you do it in plenty of time before the deadline.

There are different ways to register depending on whether you are:

When you have registered, you can use the free HMRC Self Assessment online service on the GOV.UK website to submit your tax return.

Postal applications

If you choose to send your application by post, you will need to download form SA100 from GOV.UK website.

You can also download a help form that explains how to complete your paper tax return.

Once you have filled out your form, return it to the HMRC before the deadline of 31 October.

What address should you send the tax return to?

Return your completed forms to HM Revenue & Customs, Self Assessment, BX9 1AS, United Kingdom.

What you need to complete your tax return

You need to gather all your paperwork and documents to enter the correct information when you fill out your Self Assessment. These may include:

  • P60 from your employer (if you have one) showing your income and the tax you have already paid

  • P45 if you have left a job in the current tax year

  • P11D or P9D which shows any benefits and expenses

  • A summary of any rental income and expenses

  • Savings and investment statements showing how much you have earned in interest and other income like dividends

  • Documents detailing your self-employment income, including receipts, bank statements and accounts

How can you pay your tax bill?

You must pay your tax bill by 31 January, and you can send what you owe to HMRC by bank transfer, for example CHAPS or Faster Payments, or by debit card payment.

You can no longer pay your tax bill by credit card.

You can also send a cheque through the post, or pay in your bank by using a paying in slip from HMRC which they will have sent you.

If you want to spread your payments over time, you use a budget payment plan. Here is how they work, and how to set one up.

If you end up paying more tax than you need to, here is how you can reclaim it.

Help stretch your budget a little further by making the most of your savings.