That time of year is fast approaching where those who are self-employed, a partner or director in a business, or get income from property, may need to complete a Self Assessment tax return.

The deadline for completing this return online is 31 January 2023.

What is a Self Assessment tax return?

A Self Assessment tax return is currently an annual return that demonstrates to HMRC an individual’s annual income, that does not fall into their Pay As You Earn (PAYE) earnings.

So, for example, you may be employed and paying tax via your employer under the PAYE scheme, but also have a property that you rent out.  The additional income from the property should be declared to HMRC by completing a Self Assessment tax return.

HMRC send out ‘notice to file’ notifications.  If you have received one of these, you MUST complete a return by 31 January 2023.

If you have not received one of these, but fall under certain categories, you are advised to complete a Self Assessment return by 31 January 2023, for any earnings that fall into the period 6 April 2021 to 5 April 2022:

  • If you are self-employed (unless this income is within the annual £1,000 trading allowance)
  • If you are a partner in a business
  • If you are a company director and have income on which tax is due that is not taxed under PAYE
  • If you have property income – for example, you are renting out a room, a garage or a whole property to someone else (unless this income qualifies for rent-a-room relief or is within the annual £1,000 property allowance)
  • If you want to claim tax relief on employment expenses over £2,500 in a year
  • If you have to pay a tax charge on your child benefit, known as the high income child benefit charge
  • If you have untaxed savings income. HMRC might be able to collect any tax due on small amounts without you doing a full tax return, but should always tell them about savings income of more than £1,000 a year (or £500 if you pay tax at the higher rate) and dividends of more than £2,000 a year
  • If you have capital gains tax to pay which hasn’t already been paid in-year – this should be paid within 60 days of the sale of the property.

How do I complete a Self Assessment tax return?

There are many reliefs that can be applied to additional, private income.  If you have had a ‘notice to file’ or fall into any of the above categories, it may be worth employing the services of an accountant to help you complete your Self Assessment tax return.

Accountants are experts in ensuring the return is completed correctly and have the knowledge to apply any reliefs that you may be eligible for, such as married couple’s allowance or property allowances.

This is an incredibly busy time of year for us, but we will always help where we can. The earlier you approach us though, the better we can help you.

If you would like our support with your Self Assessment tax return, or any other advice relating to tax or business, please get in touch.

Profile: Sean Page BA ACA

Helpful links: HMRC

Self Assessment tax return advice from Sean Page

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