The Self-Assessment tax year is from the 6th April until the 5th April the following year.
Self-Assessments need to be submitted by anyone who is Self Employed as a ‘Sole Trader’ and has earned over £1,000, a Partner in a business partnership, and if you are a director of a business.
Other circumstances where a self-assessment needs to be completed and submitted to HMRC are;
Income from renting out property.
Income from Tips and Commission.
Income from savings, investments, and dividends.
Income is over £100,000.
If you have received additional income and did not send a tax return for previous financial year, you will need to register with HMRC, you can do that using the following link.
Self-Assessment tax returns need to be completed and submitted by the 31st October if you submit in paper format, and by the 31st January if you submit online.
Any tax due to HMRC based on your tax return, needs to be paid by the 31st January. If the self-assessment you are completing is for the financial year 20/21 (6th April 2020 to 5th April 2021), you will need to have paid what you owe by the 31st January 2022.
It is highly important to keep records of all income, expenditure and relief claims for all tax returns. The best documentation to keep, are invoices both to customers and from suppliers and receipts. Either a physical or digital copy will suffice. GMS Accountants have seen various ways of records been keep from hard copies in shoe boxes or folders, on accounting software or on something like google drive. Accounting software would always be our recommended choice, but find a way that works for you, that way it less stressful for you. This is important, your focus should be running your business.
GMS Accountants recommend putting money away (Saving) approx. 25% of your income each month, to make certain you have enough money to pay your Self-Assessment tax bill. However, we do understand that this is not always possible due to unforeseen personal circumstances, in this case GMS Accountants recommend completing and submitting your Self-Assessment tax return by the end of August, so that you know early enough what you owe HMRC and have time to save the money to pay your tax liability.
This is a good time for us to make you aware that there are penalties if you miss a deadline and/or pay your bill late. GMS Accountants advice here is to make a note of when your self-assessment needs to be submitted by and paid by. The below link has more details about the fines.
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