Your Personal Tax Accountant

So, first things first, do you need to complete a self-assessment tax return?

You will need to file if any of the following are true:

• You earn over £100,000
• You have any foreign income (including in investment portfolios)
• You rent out a property
• You are self employed
• You are a partner in a partnership

There are also many other reasons why you may need to register, if you’re not sure use this HMRC tool to work it out https://www.gov.uk/check-if-you-need-tax-return

Next steps

1. You will need to register for self assessment by 5 October following the tax year

If you have a National Insurance number this can be done online

If you don’t, you will need to post the forms to HMRC

If you are self-employed, use this form https://www.gov.uk/register-for-self-assessment/self-employed

If you are not self-employed, use this form https://www.gov.uk/government/publications/self-assessment-register-for-self-assessment-and-get-a-tax-return-sa1

2. Unique Tax Reference (UTR)

Once your form has been filed, you need to wait for HMRC to send you a letter via snail mail. This can take up to 12 weeks, so don’t panic.

The letter you received will contain a 10 digit number, which is your Unique Tax Return or UTR. This is what you need to be able to file a self-assessment tax return, so don’t lose it ! Take a photo of it on your phone, file it in a safe place or have it tattooed somewhere discretely on your body if you have to – but don’t lose it.

3. Personal Tax Account

Make sure you set up your personal tax account with HMRC, you can do that here https://www.gov.uk/log-in-register-hmrc-online-services

Boring bit – when you register they need to identify you so make sure you have your National Insurance Number, latest payslips, P60 and passport to hand.

We know what you’re asking – why do I need to set this up?

• If you want to do your own self-assessment tax return, you can do it through here
• You can view and update all of the personal information HMRC holds for you
• You can ask for tax code changes, see that your tax and national insurance has been paid, etc.

4. Deadlines

So you’re all set up and ready to rock and roll, what next?

The UK tax year runs to 5 April and the deadline to file your return is 31 January the following year. For example, for the tax year ended 5 April 2021, the filing deadline is 31 January 2022.

You also need to pay all taxes owed for 5 April 2021 by 31 January 2022, plus your first payment on account (if required) for 2022.  The second payment on account falls due by 31 July 2022.

5. Payments on Account

You’ve read point 4 above and are panicking about payments on account now aren’t you?  Don’t worry, we’re one step ahead. If you want the technical explanation, have a look here https://www.gov.uk/understand-self-assessment-bill/payments-on-account

Otherwise, payments on account works like this:

• Your tax return shows a liability of more than £1,000
• Less than 80% of the tax owed has already been collected through your tax code (i.e through employment / pension income)

If this is the case, you have to make payments on account, let’s show you an example…

Example of a payment on account with Mr Stripes.

Mr Stripes asked his amazing accountants, Zebra, to prepare his self-assessment tax return for the year ended 5 April 2021

Wendy said ‘Mr Stripes, your total liability for the year is £20,000. You have had £10,000 collected through your job, so you have £10,000 left to pay – the date to pay this is the 31 January 2022.

As you owe more than £1,000 and only 50% of the tax owed was collected through your employer, I’m afraid you will also need to make payments on account towards your 2022 liability, so your payment schedule looks like this.

Due 31 January 2022

£10,000 liability owed for year ended 5 April 2021

£5,000 1^st payment on account for the year ended 5 April 2022 (which is 50% of the 2021 liability)

£15,000 – total liability

The 2^nd payment on account of £5,000 needs to be paid by 31 July 2022’

Is your head spinning?

Do you want to be like Mr Stripes and get someone to help you?

Is it time to find out how much a self-assessment accountant costs?

A basic self-assessment tax return will cost you just £300 + VAT

If you have any of the following, click the link to head over to the right service page for you:

Self Employed
Landlord
Foreign Income