Please note: The following content is produced by HMRC and shared by IPSE as information for our members and the wider self-employed community.
Whether you are self-employed, a business owner or maybe you have a side hustle in addition to your day job, this guide is for you.
What is Self Assessment and why do I need to do it?
Self Assessment is the process used to declare and pay tax owed on untaxed income.
If you are employed, then your employer will deduct any tax owed (Income Tax and National Insurance) before they pay you. This is known as PAYE (pay as you earn) and is also known as being taxed at source. But if you have any additional income, which has not been taxed, you may need to do a tax return.
If you don’t have an employer deducting your tax or National Insurance, you may be required to do a Self Assessment tax return.
Who must send a tax return?
GOV.UK sets out who must send a Self Assessment tax return each year.
You must send a tax return if you:
- are self employed
- had a total taxable income of more than £100,000
- need to pay the High Income Child Benefit Charge
If you are unsure, you can use the free online checking tool on GOV.UK to check whether it applies to you.
How can I register for Self Assessment?
If you need to complete Self Assessment, you must register via GOV.UK.
If you are self-employed, you will need to register for Self Assessment and Class 2 National Insurance contributions.
If you’ve not used our online service before you’ll need two forms of evidence to prove your identity. This can include your UK passport and UK driving licence. We may also offer you a new identity checking app as an alternative. It lets you use the camera on your phone to confirm a match with your driving licence.
Once you have registered, HMRC will send you your Unique Taxpayer Reference (UTR). Keep this safe because you will need it every year when you complete your Self Assessment.
What information will I need before I start my tax return?
When you are ready to start your tax return you will need your UTR and National Insurance number – you can get these on the HMRC app, as well as details of your income, earnings and other financial records. If you are unsure what records you need to keep in order to complete your Self Assessment, you can check on GOV.UK.
When is the deadline?
The Self Assessment deadline for the 2022 to 2023 tax year is 31 January 2024.
You must file your tax return and pay any tax owed by the deadline. If you miss it, you may incur penalties.
Other Self Assessment dates to remember:
30 December – the deadline if you want HMRC to automatically collect the tax you owe from your wages and pension. Find out if you are eligible to pay this way.
For customers who pay their current estimated tax bill via Payments on Account, the first instalment for the 2023 to 2024 tax year is due on 31 January., the first instalment for the 2023 to 2024 tax year is due on 31 January.
How do I submit my tax return?
You can do it online. You can save your progress and fill it in at a time that suits you ahead of the deadline. There is no fixed length of time to complete your tax return. If you have straightforward tax affairs, the likelihood is that it will take you less time to complete it compared to someone with more complex tax affairs.
What help is available?
It is important to make sure the information you provide on your tax return is accurate and HMRC wants to help taxpayers to get it right first time.
Before you pick up the phone to HMRC, take a look at the many online resources and guidance to help you with your tax return on GOV.UK.
Our phone lines get busy in the run-up to the deadline in January, but you can use our online services to do what you need to do quickly and easily.
Around two-thirds of all Self Assessment calls can be resolved by customers themselves online. We’ve found customer satisfaction for our online services is consistently around 80%.
HMRC has a series of video tutorials on YouTube to help you, including how you can register and fill in your first tax return. There is also a new customised step by step guide for anyone filing their return for the first time.
How do I pay?
Once you have filed your Self Assessment, it is time to arrange to pay any tax you owe. The earlier you file, the more time you will have to plan how you will pay your tax bill. If you submit your tax return before the deadline, you do not have to pay what you owe until the 31 January, although you can choose to do so. It’s up to you.
The quickest and easiest way to pay your Self Assessment is via the HMRC app. This YouTube video explains how you can use the app to make a payment through online banking or your bank’s own app.
You can make a payment any time, for any amount, but you must pay what you owe by the deadline to avoid interest and penalties. If you can’t pay in full, HMRC will work with you to find an affordable way for you to pay the tax you owe. If you owe less than £30,000 you may be able to do this online without speaking to us. Go to GOV.UK and search ‘HMRC payment plan’.
Remember to include your bank account details on your tax return so that we can repay you quickly and securely if you are owed a refund.
Working from home tax relief
If you work from home, you may be able to claim tax relief for your job expenses which you get through a change to your tax code. Anyone who claimed it when working from home during the pandemic but who is now back in the office should check their tax code to make sure it accurately reflects their current situation.
Do I need to do Self Assessment every year, even if I don’t make as much money as last year?
Yes, Self Assessment is an annual requirement. If you make less money, your tax bill will be calculated accordingly. It’s important to let us know if you have stopped being self-employed or your business has closed, or of any changes to your details, such as a new address or name.
Don’t assume someone else will update us, please do this yourself on GOV.UK. It is important to tell HMRC before the deadline on 31 January 2024 to avoid any penalties.
HMRC’s tips for getting it right
- Plan ahead – when you are ready to start, get all the documents you will need together so you don’t have to search for them at a later date.
- Take your time – accuracy is important when completing your tax return. Give yourself plenty of time to fill it in and don’t rush.
- Go online for help – there is help and support available on GOV.UK to help you get your tax return right. But if you’re not doing it yourself, you can appoint someone to fill in and send your tax return, for example an accountant or tax adviser. If you need extra support to help your with Self Assessment you can contact a voluntary or community sector organisation who can provide you with help and advice.
- Remember the deadline – it’s 31 January 2024. Put it in your calendar or set a reminder on your phone. If you miss the deadline, you risk facing penalties.
- Don’t forget to press ‘submit’ – if you’re filing online, don’t forget to press the ‘submit your tax return’ button. HMRC won’t receive your tax return until you press that button and if you miss the deadline you could incur penalties.
- If your circumstances change – remember to tell HMRC if you close your business or you are no longer self-employed. Don’t assume we will know. You could still incur fines and penalties after your business has stopped trading if we aren’t informed. Tell us on the HMRC app or via GOV.UK. https://www.gov.uk/tell-hmrc-changed-business-details
Have you ever had a business idea that needed significant capital to start? Angel investors offer an alternative to business loans or venture capital (VC) funding...
In this guide, we run through the key things you need to know about IR35 as a self-employed professional, including the difference between 'inside' and 'outside' ...
Even the most resilient self-employed professionals can be thrown by unexpected challenges, including power cuts, internet outages, office thefts and more. Find o...
