Whilst it's understandably frustrating to see how much tax you owe on your Self Assessment tax bill, filling out tax returns and paying owed tax is a fundamental part of life that keeps our society up and running — your taxes fund crucial services such as the NHS and transport systems. Despite this, over two million people missed the self-assessment tax return deadline this year.
The last thing you need is HMRC breathing down your neck near the tax return deadline or a penalty for not submitting on time. The best way to avoid this is to get ahead and ensure you give yourself plenty of time to get your records in order.
If you're self-employed, a sole trader, or you receive income outside of PAYE, you are responsible for declaring your earnings to HM Revenue & Customs (HMRC) and paying tax yourself through a process called Self Assessment.
In this article, we'll cover everything you need to know about submitting a Self Assessment tax return. From who needs to submit them to how to fill one out, we'll make sure you know what you need to do and when.
The deadline for Self Assessment tax returns depends on the method you choose to use for submission. Paper tax returns for this year must be received by HMRC no later than midnight on 31 October 2022, and online tax returns must be received by midnight on 31 January 2023.
A Self Assessment tax return is an online or paper form that you need to submit to HMRC each year to declare the Income Tax you owe. Usually, Income Tax is automatically deducted by employers from your wages or pension using the PAYE system. However, if you earn money outside of PAYE, it is your responsibility to report your earnings to HMRC and pay your tax bill to cover any Income Tax you owe.
You will need to complete a Self Assessment tax return if any of the following apply:
- Your self-employment income was more than £1,000 before claiming any tax relief
- Your income from property rentals was more than £2,500
- You earned more than £2,500 in untaxed income, e.g. from tips or commission
- Your income from savings or investments was £10,000 or more before tax
- You owe Capital Gains Tax on profits from selling assets, e.g. shares or a second home
- You are a director of a company — unless it's a non-profit organisation such as a charity
- You're claiming Child Benefit, and your or your partner's income was over £50,000
- You receive foreign income that you need to pay tax on, or you live abroad but receive income from the UK
- Your taxable income exceeded £100,000
- You are a trustee of a registered pension scheme or trust
- Your only source of income was your State Pension, and it was more than your personal allowance
- You received a P800 from HMRC stating that you didn’t pay enough tax last year
Additionally, if you only receive income from wages or your pension, you will not normally be required to complete Self Assessment. This said, if you receive any other untaxed income, you may need to declare it in a tax return form. Examples of other income include:
- Money earned from renting out properties
- Tips and commission
- Income from investments, savings, or dividends
- Foreign Income
If you've never submitted a Self Assessment tax return before, you'll need to register to do so — the deadline for registering is 5 October.
How you register for Self Assessment depends on whether you're:
- Self-employed or a sole trader
- Not self-employed
- Registering a partner or partnership
Self-Employed or a Sole Trader
If you are self-employed or a sole trader and you did not complete a tax return the previous year, you'll need to register for both Self Assessment and Class 2 National Insurance.
If you've never filed a tax return before, you'll need to register through your business tax account. Use your Government Gateway ID and password to sign in — you will be able to create a Government Gateway ID if you do not already have one. Once you have registered, you'll be sent a letter containing your 10-digit Unique Taxpayer Reference (UTR), which you will need to file your tax return. You will also be sent a reminder letter or email to remind you to complete Self Assessment.
Alternatively, if you have filed a tax return before, you can re-register online using form CWF1. You'll need to use your UTR from the previous time you registered. If you can't remember your UTR, you can find it on tax payment reminders and notices to file your tax return.
If you need to complete a tax return to declare earnings outside of PAYE and you've filed a tax return before, all you need to do is sign into your existing online account using your Government Gateway ID.
However, if you have not filed a tax return before, you'll need to register for Self Assessment using form SA1. This can be done either online or by printing out the form, filling it in and then posting it. Once your form has been received, you'll be sent your Unique Taxpayer Reference within ten working days. If you're registering online, you'll need to use your UTR to sign into your personal tax account and then activate your Self Assessment. Alternatively, if you registered using a paper form, create your personal tax account online. Once you have done this, you'll receive an activation code which you should use to activate Self Assessment — you can replace your activation code if you did not receive one or you've lost yours.
Registering a Partner or Partnership
When registering for Self Assessment as a partner, you'll need your partnership's UTR. If you are the 'nominated partner', you'll also need to register your partnership.
The quickest way to submit a Self Assessment tax return is online. In order to submit an online tax return, you'll need to be either self-employed or not self-employed, but you still send a tax return for income outside of PAYE. For example, if you are employed but also receive income from renting property.
You cannot file a tax return online:
- For a partnership
- For an estate or trust
- If you live abroad as a non-resident
- If you are reporting 'chargeable gains' such as life insurance
- If you receive income from a trust
- If you're a Lloyd's underwriter or religious minister
There are two deadlines for paying your Self Assessment Tax bill:
- 31 January: the deadline for any tax you owe for the previous tax year and your first payment on account (advance payments towards your tax bill)
- 31 July: the deadline for the second payment on account
You can pay your tax bill online using one of the following methods of payment:
- Through your online bank account
- Using online or telephone banking
- By debit card online (or using a corporate credit card)
- At your building society or bank
- Using Bacs
- By Direct Debit
- Sending a cheque in the post
Finally, ensure sure you allow enough time for your payment to reach HMRC as you will be charged interest and possibly have to pay a penalty if it is not received by the deadline.
Is there a penalty for submitting a Self Assessment tax return late?
Yes, there is a penalty for missing the deadlines for submitting your Self Assessment tax return or paying your tax bill. If your tax return is up to three months late, you'll receive a £100 late filing penalty. You will pay more if your tax return is over three months late or you are late paying your tax bill. Additionally, you will be charged interest on any late payments. If your tax return is over three months late and you are not sure how much you'll be charged for interest and the charge for late filing, you can estimate the penalty for late Self Assessment tax returns online.
If you have a reasonable excuse for filing your Self Assessment tax return late, you can appeal against a penalty. Examples of reasonable excuses include:
- Your partner or close relative died shortly before the Self Assessment tax return or payment deadline
- You had to stay in a hospital unexpectedly, preventing you from dealing with your taxes
- There were postal delays that you could not have predicted
What happens if you have made a mistake on your tax return?
If you have made a mistake on your tax return and submitted it before the deadline, you can amend it within 72 hours (3 days) of filing it. Changes need to be made by:
- 31 January 2023 for the 2020 to 2021 tax year, or
- 31 January 2024 for the 2021 to 2022 tax year
If, however, you have missed the tax return deadline or you need to amend a tax return for another tax year, you'll need to write to HMRC. Your tax bill will then be updated, and based on what you have reported, you may have to pay more tax or be eligible to claim a tax refund.
How do I get help with your tax return?
There are several ways to get help with your Self Assessment tax return. Some things you can do include:
- Appoint someone to fill in and send your tax return on your behalf. E.g. an accredited accountant, a friend, or a relative.
- Watch videos or join webinars
- Contact HMRC about general Self Assessment enquiries
You'll need to complete Self Assessment if you are self-employed, a sole trader, or you are employed but receive income outside of the PAYE system. If you have not completed Self Assessment before, you'll need to register by 5 October. Registering is usually done online, but it does also depend on whether you're:
- Self-employed or a sole trader
- Not self-employed
- Registering a partner or partnership
Check which method you need to use and ensure you have properly registered before the deadline. Once you have received confirmation, you'll be able to fill out your tax return. The deadline for submitting your Self Assessment tax return is 31 October 2022 for paper tax returns and 31 January 2023 for online tax returns. You must ensure that your tax return reaches HMRC before the deadline to avoid penalties in the form of fines or interest.