Death and taxes | Everything you need to know to complete a self-assessment

 
Deep Dive Category

Everything you need to know to complete a self-assessment


A lot of people might not know that they fall into the category of those required to complete a Self-Assessment Tax Return (SATR) – but it’s worth reading this article to make sure the taxman won’t come a-knockin’...

The time is nigh for submitting your Self-Assessment Tax Return (SATR) and making arrangements for payment to HMRC. But if it’s your first time, or you’re putting it off, don’t worry, we’ve spoken to the experts and have all your bases covered…

As with any deadline, the annual 31st January date by which British tax residents must submit their SATR is as tempting as any other to put off. However, this is one deadline you simply can’t miss – unless you can fork out for the huge penalties HMRC will whack you with if you do.

So, who’s required?

You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied:

  • you were self-employed as a ‘sole trader’ and earned more than £1,000 (before tax claims) – this includes contractors and freelancers
  • you were a partner in a business partnership
  • you earned £100,000 or more
  • You may also need to send a tax return if you have any untaxed income, such as:
  • some COVID-19 grant or support payments
  • money from renting out a property
  • tips and commission
  • income from savings, investments and dividends
  • foreign income

If you fall slightly into one of these categories, but aren’t quite sure, you can use this handy link to check if you need to complete a SATR. And if you are definitely required to file, but haven’t done so yet, don’t worry – there is still a bit of time, and you can always make arrangements with the tax bureau by setting up a payment plan.

But now, let’s turn to the experts for their advice.

Lee Murphy, MD of The Accountancy Partnership, had this advice for HR Grapevine readers: “It’s good practice to save 30% of your self-employed income each month to pay your annual tax bill. This is based on the 20% income tax base rate and 9% National Insurance rate. If you’re new to running a business, running a side hustle you may be unfamiliar with this saving method, but it’s really important that you keep some of your earnings to one side if you earn more than around £13,000 per year, because this is the point at which you’ll start paying tax on any income.

You've read 32% of the article so far,
subscribe to continue reading - plus lots more!

Annual packages are now available for £199...

Join our growing community of forward thinking HR leaders and get unlimited access to the full archive, as well as exclusive reports, how-tos, deep dives, and video interviews.

* Billed via Credit/Debit card at £199 for first year, then £299 per annum.
One time use only. New customers only.

Welcome Back

Spark the conversation and share this with the myGrapevine+ community

Share this with your colleagues