I’m Self-Employed. Where Do I Start with My Self-Assessment Tax Return?

If your self-employment income was more than £1000 for the tax year, you will need to fill out a self-assessment tax return. This can feel like a very daunting prospect, but they’re actually much more straightforward than they seem. The key is to know what you’ll need, have your paperwork in order and work through each section one by one.

If you have never filled one out before, the first thing you’ll need to do is register on the gov.uk website. This will generate your Unique Taxpayer Reference (UTR), which will be sent to you in the post for security purposes.

Can I Complete My Self-Assessment Tax Return Online?

Yes, and this is probably the easiest way to complete your tax return. If you’ve never done this before, you need to set up a Government Gateway account. There are instructions for this enclosed with the letter confirming your UTR. If you’re setting this up at a later stage, you can visit the gov.uk website to find out how to do this.

Once you have set up your Government Gateway account, you will receive an activation code in the post. Once activated, you can use your account to complete and file all future tax returns, as well as accessing other online government services, such as childcare services and other HMRC services.

If you would prefer to complete a paper tax return, you need to download form SA100 from the gov.uk website and fill it out by hand.

When Do I Need to Complete My Self-Assessment Tax Return?

Tax returns are submitted for tax years, which run from the 6th April–5th April each year. They are filed in arrears and the deadlines for filing and paying any tax due are as below, (dates based on the 2019–2020 tax year). Failure to meet these dates could result in a penalty fee being charged:

  • If you’ve never submitted a return before: register for self-assessment by 5th October 2020
  • If you’re filing a paper tax return: submit it by 31 October 2020
  • If you’re filing online: submit it by 31 January 2021
  • Make sure you pay any tax owed by 31 January 2021

What Information Will I Need?

Whether you are completing your tax return on paper or online, you will need the following information:

  • Your Unique Taxpayer Reference (UTR)
  • Your National Insurance (NI) number
  • Details of your pre-tax income for the relevant tax year (this should include self-employed income, dividends and any interest on shares)
  • Details of any expenses relating to your self-employed business
  • Any charity or pension contributions that may attract tax relief
  • P60 or other records showing income you’ve already paid tax on

Once you have all this information to hand, you will have everything you need to work through various sections of your self-assessment tax return.

What Help Is Available?

There are HMRC Helpsheets available, which can be downloaded from the gov.uk website. If you use an accountant, they will also be able to offer advice and support for filling out your self-assessment tax return.

When and How Do I Pay?

Once you have completed your self-assessment tax return, you will be told how much tax and National Insurance you have to pay.

The deadline for paying is 31st January. You must pay the amount owed for the previous tax year in full by this date to avoid penalties. If you are paying close to this deadline, make sure you choose a fast payment method, such as debit card, CHAPS or in person at your bank.

Payment on Account

If you’re self-employed and your tax bill is £1000 or more, you will be asked to make ‘payments on account’ towards your next tax bill. This comprises two payments, one payable by January 31st and the other by July 31st, each of which is half of your previous year’s tax bill.

If your actual tax bill for the following year ends up being less than you’ve paid, HMRC will refund you the difference. If you already know your next tax bill will be lower (for example, if you’re going on maternity leave or reducing your working hours), you can contact HMRC to request a reduction in your payments on account.