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The process of self assessment was put together to allow you to tell HM Revenue & Customs about your income for a specific tax year. The tax year runs between 6th April and 5th April. All income during this period needs to be detailed for tax purposes. Income includes:
Your Self Assessment Tax Return allows to you to claim tax allowances and detail your expenses that can be attributed to your income in order to claim tax reliefs against your tax bill.
TaxPenny can minimise your tax bill by making sure the maximum reliefs are taken advantage of and all the correct allowances for your circumstances are acknowledged.
There are different types of tax return and depending upon your circumstances, additional 'supplementary pages' may be required.
There are strict deadlines for filing your tax return. All tax returns processed by TaxPenny are submitted electronically before the January 31st online filing deadline.
If you are paying tax through PAYE (Pay As You Earn) then your employer or pension provider will deduct tax at source. In these cases you usually are not required to complete a tax return. Your tax code may be adjusted to take additional tax for state pension earnings or investment or rental income up to a certain level. If this is possible, you may avoid having to complete a tax return.
If you have more complicated tax affairs then a tax return will be necessary. If you are self-employed, a company director, a trustee or have a foreign income then completing a self assessment tax return is compulsary.
If you are 65 or over, HM Revenue & Customs may ask you to fill in a tax return so that they can work out how much higher personal allowance or Married Couple's Allowance you should get.
Self Assessment tax returns are sent out around April each year.
If you have already submitted a tax return online before you will receive only a notification and not the actual return paperwork. If you think you should be completing a tax return but haven't received a notification, please contact you local tax office who will have to send one out. You cannot complete a tax return without first notifying HM Revenue & Customs.
If you are newly self-employed, you will need to register as self-employed - you'll then be sent a Self Assessment tax return if necessary.
Any income that isn't taxed at source, like freelance earnings or rental income, will have to be declared via a tax return.
You need to fill in a tax return if you:
During the tax year (6 April one year to 5 April the next) there are key dates by which you need to file your tax return and/or make certain payments. It is important to make note of these dates and not miss them as HM Revenue & Customs can impose fines and penalties.
Around the start of each new tax year (from 6th April), HMRC send you a notice to complete a tax return for the previous tax year's earnings. This notice may be the paper tax return form itself, unless you are already set up or have previously set up online tax return submission, in which case the notice will just be a letter (notice to file letter).
TaxPenny submits all tax returns via our secure online account. The deadline for all submissions through TaxPenny is 31st January or 30th December (if you want your tax to be collected through your tax code - less than £2000 only).
As long as the notification to file a tax return is before 31st July, you have until 31st January to submit your tax return.
If you receive notifciation to file after 31st July, you have the later of either 3 months following notification or 31st January.
If you miss these deadline, HMRC will charge you a penalty of £100.
The paper version of the main tax return is made up of two core forms (SA100 and SA101). There can also be supplementary pages dependent upon your circumstances (property income etc).
If you get the full tax return notification you will need to:
From just £75 + VAT:
If you're a UK taxpayer you should keep a record of the tax you pay each year and other records relating to your income.
You should keep all documents containing details about your pay and tax that your employer provides, including:
You should also keep:
When you're employed you may be able to claim for expenses to reduce the tax you'll have to pay. You'll need to keep records so you can include the expenses in your Self Assessment tax return. There is more information about Tax Relief for expenses within our Tax Refund section.
You should keep any documents relating to:
You should keep:
You should keep all:
You should also keep:
If you get income from letting out a property, you'll need to keep details of the rents you've received and the expenses you've paid. Find out more about our rental accounts service.
You'll need to keep any dividend vouchers, tax certificates and personal financial records. Find out more about Capital Gains.
You should keep information on any share options awarded or share participation arrangements.
You'll need to keep contracts and other documentation about assets you've bought, sold, exchanged, given away or acquired. You should also keep any bills, invoices or other evidence of payment such as bank statements and cheque stubs for the costs of buying, improving or selling assets - as well as copies of any valuations used in your calculations. More about Capital Gains here.
If you're self-employed or in business there are certain records you legally have to keep. There are also good business reasons for keeping good records.
Your basic records will normally include:
You or your accountant use these records to create a profit and loss account - which shows the sales income you've received and the expenses you've paid, and what profit/ loss you've actually made.
It's helpful to keep a separate record of purchases and sales of assets that you use in the business, such as equipment. These need to be treated differently in your tax return.
You can claim capital allowances for assets, which means that rather than claiming the whole cost at the time you buy, you reclaim the cost over time.
All businesses are different and there are many specific types of detailed record that may need to be kept. Some examples of records you should keep include:
All this information will be useful in completing your Self Assessment return. You'll need to keep certain records and hold on to them for several years so that you can back up the information you put on your return.
If you're not running a business you'll normally have to keep your records for at least 22 months from the end of the tax year to which they relate. For example a form P60 for the tax year 2006-07 mustn't be destroyed until after 31 January 2009.
It's advisable to keep documents relating to buying or improving assets until at least 22 months after the end of the tax year in which you disposed of the asset. These documents will help you calculate any capital gains or losses and answer any queries we have. For example if you dispose of an asset in February 2007 you must keep any records relating to its purchase, improvement and disposal until after 31 January 2009.
If your records are lost or destroyed and you can't replace them you must tell us what has happened and do your best to recreate them.
Once you've gathered replacement information you use this to complete your tax return. You must tell us whether any provisional figures are:
If you make adjustments at a later date and you've underpaid tax there may be interest and penalties to pay.
Under UK tax law and the Self Assessment process, responsibility for declaring all sources of income rests on you as the taxpayer. Sources of income include earnings from employment, pensions, self employments and directorships. You must also declare other sources such as Capital Gains, these are the profits made on the sale of assets, and investment income.
Once you have declared your income, you can offset the amount of tax you pay on it by claiming tax allowances and reliefs. TaxPenny's qualified, experienced advisers maximise these and minimise your tax bill.
Please DO NOT ignore a notice sent to you by HM Revenue & Customs to complete your Tax Return. If you do, you could suffer a PENALTY and INTEREST may be charged on any tax paid after the official due date(s).
HM Revenue & Customs state if you have complicated tax affairs you may need to complete a Tax Return.
Generally, you will need to complete a tax return if you fall under the following classifications:
Remember, if you have any income that is not taxed at source, like rents or private earnings, you may need to complete a Tax Return.
Complex tax affairs requiring a Tax Return include:
If you are 65 or over, HM Revenue & Customs may ask you to fill in a Tax Return so that they can work out how much higher personal allowance or Married Couple's Allowance you should get.
Typical changes which may mean you need to complete a Tax Return for the first time as an individual might be:
If you have received a notice to complete a Tax Return for 2007/08 you'll need to fill in the Capital Gains Summary pages, if in that tax year:
Paper Tax Returns are normally sent out in April of each year. If you file online, you will receive a notice requesting that you complete a Tax Return instead.
If you have not received a Tax Return but think you should complete one contact your Tax Office. Your employer or pension provider will have details of this, or you can search online. For individuals who are self employed during the previous tax year, you are required to request a Tax Return from HM Revenue and Customs within 3 months of the tax year ending, if this has not already been sent to you. In all other cases, you can ask for a Tax Return at any time - for example, if you want to claim a particular tax relief or exemption. Depending on your circumstances you may be sent a short four-page Return, or the full Return.
If you are sent a Tax Return, you must complete it and send it back within the due date. If you require assistance please contact TaxPenny for further advice immediately. We can complete your tax return from as little as £75 + VAT.
You can save time and paperwork by having TaxPenny complete your Tax Return for you. Once you have accepted our quote, we:
If you have made an error, forgotten something on your Self Assessment tax return or think you have paid too much tax, TaxPenny can take care of it.
If you think you've paid too much tax in a year when you didn't complete a tax return, let us know. If we think you're owed a repayment, in most cases you can get a tax rebate as long as you claim it no later than five years after 31 January following the year for which you're making the claim. For example, you would have until 31 January 2012 to make a claim for the year 2005-06.
If you completed a tax return for the year when you think you paid too much tax let us know. In most cases you can do this up to five years after 31 January following the year for which you're making the claim.
Bear in mind that in both circumstances HM Revenue & Customs examine all your tax affairs for that year - not just the subject of the claim.
If you're not running a business you'll normally have to keep your records of income, expense claims and contracts detailing purchases and disposals of capital assets, for at least 22 months from the end of the tax year to which they relate.
For self employed the records must be kept for 6 years from the end of the tax year to which the related to.
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