Welcome to AudTax, your trusted accountant for self-assessment
In our experience, there is no such thing as a straightforward tax return. It’s a complex process that can be difficult to deal with if you are a busy, self-employed individual. Fortunately, the professional team at AudTax have got you covered.
We are here to prepare and file your tax return using government-approved software to comply with Making Tax Digital. We will liaise with HMRC on your behalf and ensure your return is submitted with accuracy and according to the deadline. We will also calculate your tax bill and let you know how much and when to pay.
While compliance is a priority, we will go one step further and seek to minimise your costs by calculating business expenses and other available reliefs to ensure you are not paying too much tax.
Contact us today to ask any questions or to arrange a free consultation. We look forward to hearing from you.
What is a self-assessment tax return?
A self-assessment tax return is an annual process of reporting self-employed earnings to HM Revenue and Customs (HMRC) and calculating an individual’s Income Tax bill. Self-assessment is a mandatory requirement in the UK for all self-employed individuals, whether you are operating as a director of a limited company director, a business partnership or as a sole trader.
When must you register for self-assessment?
You are required to register for self-assessment once your earnings exceed £1,000 per year. Once your earnings exceed your personal tax-free allowance, you will be required to pay income tax at a rate commensurate with your earnings.
Once registered, you must continue to submit a tax return on an annual basis, regardless of whether any income is earned. You can only cease self-assessment with agreement from HMRC.
What records do I need to keep?
Year-round bookkeeping ensures that the process of dealing with your tax affairs is far more straightforward. This requires recording all of your income and expenditure, at the very least.
Expenses: You can claim certain business expenses, such as energy bills, subscriptions and tools used for your business, against your tax bill, so it’s essential to keep an accurate record of them.
Income: It’s important to summarise your earnings from various sources, keeping records such as bank statements, sales invoices, and receipts.
What income do I need to declare on my self-assessment tax return?
Along with the income from the sales of your products/services, the following sources of revenue are also deemed ‘untaxed income’, i.e. income that isn’t taxed at source, so must also be declared on your annual tax returns:
Rental income: All types of rental income, including residential properties, commercial properties, holiday lettings, and renting out land or property, should be declared on a personal tax return.
Dividends: You must report any dividends taken from a limited company, which is liable for dividend tax after the tax-free allowance.
Investments and savings: You must report any interest earned on your investments, including savings accounts, bonds, or other investment vehicles.
Capital Gains: If you have profited from the sale or disposal of certain assets, such as property, vehicles, or equipment, you must report it on your self-assessment return and pay Capital Gains tax on any profit exceeding the Annual Exempt Amount.
It’s also important to consider child benefit; if you or your partner earn above a certain threshold, you may be required to repay a portion or all of the child benefits received through an income tax charge, which will be taken into account during self-assessment.
What tax reliefs are there?
Depending on your circumstances, there are potential tax reliefs available, including:
Pension contributions: Contributions made to a pension scheme can potentially reduce your taxable income, resulting in lower tax liability.
Capital Allowances: Tax relief on the cost of purchasing or improving business assets, such as equipment, machinery, or vehicles, through annual investment allowance or writing down allowances.
Research and Development (R&D) Relief: If your business is involved in eligible R&D activities, you may be able to claim enhanced tax relief on qualifying R&D expenditure. It’s easy to overlook valuable tax reliefs, which is why it’s important to engage the assistance of a professional tax accountant like AudTax.
When are the deadlines for self-assessment tax returns?
The self-assessment tax return deadline is the same every year. You need to complete your personal tax returns by 31st January, which covers the 12 months up to 5th April of the previous tax year.
Your tax bill is also due by 31st January, either in full or in two instalments on 31st January and 31st July. Whether you pay in instalments depends on the amount of tax owed, which your accountant can advise you on.
Is there a penalty for non-compliance?
If you submit your tax return late, inaccurately or miss the payment deadline, there are penalties, including fines, interest charges, and potential legal action, depending on the severity and circumstances of the non-compliance.
If you are registered self-employed, it is a good idea to hold back your tax in a separate bank account as you earn it so that you can cover the cost of your tax bill once it’s due.
It’s wise to employ an accountant like AudTax to take care of your tax return, avoid penalties and remain compliant.
Our self-assessment tax return service
Whatever your self-assessment requirements, we will work with you every step of the way. As your accountant, we will:
- Calculate your tax liability
- Complete your tax return
- File your tax return online upon your confirmation
- Advise you on the amount of money that should be paid and the deadlines for payment
- Deal with any tax investigations that arise
- Help you to avoid penalties or challenge them if they arise