he UK Self-Assessment system is a method used by HM Revenue and Customs (HMRC) to collect Income Tax from individuals and businesses with income not taxed at source.
We can assist you with your responsibilities by advising you if you need to complete a self-assessment. If you do, we offer services to get you signed up and gather the correct information and claim the correct allowances.
Features of UK Self-Assessment
Tax Reporting: Individuals report their income, expenses, and other financial details to HMRC.
Annual Returns: Tax returns are filed annually, covering the tax year from April 6 to April 5 of the following year.
Online Filing: Returns can be filed online, making the process more efficient and accessible.
Process of UK Self-Assessment
Register for Self-Assessment: If you need to file a return, you must register with HMRC by October 5 of the tax year.
Gather Documentation: Collect all necessary documents, such as bank statements, receipts, and records of income and expenses.
Complete the Return: Fill out the Self-Assessment tax return form (SA100) online or on paper.
Submit the Return: Submit your completed return to HMRC by the January 31 deadline following the tax year.
Pay Any Tax Owed: Ensure any tax owed is paid by January 31 to avoid penalties.
Who Needs to Complete a Self-Assessment
You need to complete a Self-Assessment tax return if any of the following apply:
Self-Employed: If you’re self-employed and your income was more than £1,000.
Company Directors: If you’re a director of a company.
High Earners: If your total taxable income was more than £100,000.
Investors: If you had savings or investment income of more than £10,000.
Foreign Income: If you received income from abroad.
High Income Child Benefit Charge: If you earned more than £50,000 and claim child benefit.
Untaxed Income: If you earned more than £2,500 in untaxed income, such as renting out a property.
Examples of Allowable Expenses
Depending on your type of income, here are some examples of expenses you can claim on your self-assessment:
Office Supplies: Stationery, printing costs, ink and postage.
Phone and Internet Bills: Only the portion of the bill related to business activities.
Office Equipment: Computers, printers, and software used for business purposes.
Travel and Transport: Fuel, parking, train or bus fares for business travel.
Business Premises: Rent, utilities, business rates, and insurance for business premises.
Legal and Professional Costs: Fees for accountants, financial advisers, solicitors, and surveyors.
Raw Materials and Stock: Costs of raw materials or stock for businesses selling products.
Marketing Expenses: Digital advertising, website costs, and social media advertising.
Professional Insurance: Public liability or professional indemnity insurance.
Home Office Expenses: Proportion of costs for heating, electricity, internet, and telephone if you work from home.
Tax-Free Allowances
Here are some tax-free allowances you can benefit from:
Personal Allowance: The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
Trading Allowance: The first £1,000 of income from self-employment is tax-free (if your other income doesn't reach the personal allowance).
Property Allowance: The first £1,000 of income from property rental is tax-free (if your other income doesn't reach the personal allowance), unless you’re using the Rent a Room Scheme.
Personal Savings Allowance: You can earn up to £1,000 in savings interest tax-free if you’re a basic-rate taxpayer, £500 if you’re a higher-rate taxpayer, and no allowance if you’re an additional-rate taxpayer (this is available whether you reach the personal allowance or not, including interest charges on your credit directors loan account).
Blind Person’s Allowance: An additional allowance of £2,870 for blind individuals.
Married Couple’s Allowance: This can reduce your partner’s tax if your income is less than the standard Personal Allowance.
For more detailed information and to register for Self-Assessment, you can visit the GOV.UK Self-Assessment page.
If you think we can help your business, get in touch or call us at 0115 646 2003.
Comments