Self-Assessment Tax Return guide for self employed

You will need to file your self assessment tax return each year if you are sole trader, self employed, freelancer, work from home or employed working for multiple employers or if you are receiving any other income.

It can be complicated when you come across changes made by government each year. Incorporating and summing up income from all sources can be a difficult task. It can become stressful with approaching deadlines for filling self assessment tax returns. In this article we have summarised what you need to know before filling your tax return as self employed.

What type of tax do self employed pay?

As self employed it can depend on how you want to setup your business. You can be self employed and form a limited company. You can be self employed and register as sole trader with HMRC. Most common taxes you pay are Income Tax, National Insurance, VAT and corporation tax.

Am I responsible for my business’s tax payments?

If you are self employed, you are responsible for filling your tax returns in time and making sure all taxes are paid by the due date. Delaying in compliance may result in penalty and delaying in payment will incur interest.

If you are working through company, there are different rules. But as a director of company you have responsibility of filling your accounts and tax returns in time.

How does the Self Assessment process work for self employed?

As self employed, you must register with HMRC for self assessment. If you are a contractor and work through limited company, you should also register for self assessment as director of limited company.

Registering for Self Assessment

To register as self employed you would need to visit gov.uk registration page. It will get you automatically register you for self assessment. But if you have to register for self assessment as director of limited company you will have to register on a different page and send form SA1.

You will register for government gateway ID and this will give you access to manage all of your business and personal taxes at one place. Once you are register for self assessment, you can file your tax return online.

Tax return deadlines

Paper tax returns must be filled by 31st October each year. As the implementation of MTD goes along paper tax returns will no longer be accepted by HMRC in future. For online tax returns dead line is 31st January.

There are penalties for not filling tax returns in time and also fines and interest for not paying self assessment tax.

Changes to Self Assessment

As part of implementation of Making Tax Digital, Government have announced number of changes to Self Assessment process. This includes filling quarterly income tax returns and abolishing paper tax returns. Now, only business who are VAT registered will have to submit their tax returns electronically. But moving forward it will be implemented to self employed and small business.

If you need hale with your self assessment tax returns, company accounts or tax planning , call us for further advice and tax planning.


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