SA Tax Return

What is Self Assessment?

The self assessment tax return is a document used by HMRC to gather information that will allow calculation of tax you have to pay during the particular tax period. You must do this once a year by completing the online declaration or posting it to HMRC. In the document, you declare your taxable income and capital gains, as well as any allowances and reliefs you are entitled to.

Often in December, with the 31 January online-filing deadline looming, many people start to worry about completing their Self Assessment tax return.

Who should remember about this?

According to tax legislation, if during the period which runs from 6 April to 5 April you have been earning over £1,000 as a sole trader or a partner in a qualifying business relationship, you are required to submit a Self Assessment and pay any tax within set deadlines.

Who needs to submit a Self Assessment?

You may also need to submit a return if:

You’re a company director
You receive income from a trust, settlement or estate
You have untaxed income from renting out a property, tips or commission and foreign income
You have untaxed income from savings, investments and dividends
You or your partner receive child benefits and your income is more than £50,000
You have capital gains from self of an asset or investment
You want to claim certain tax reliefs

However, it should be noted that there may also be other circumstances or combination of factors that will be triggering the need for Self Assessment tax return, so if you wanted to find out which scenario may be applicable in your case, please contact us without delay.

In order to put the above into perspective, please see below the extensive list of information normally requested from their clients by accountants attempting the conscientious completion of Self Assessment:

Copies of bank statement documenting income and expenditure for the period in question that are liable for UK tax assessment This refers to ALL registered in your name UK as well as any overseas accounts
Full details of all of your business related (self-employed activity) income and expenses, together with the corresponding sales and purchase invoices or receipts as well any vouchers or certificates stating amount of tax deductions paid at source (CIS vouchers in particular)
Details of ALL employment income, presented in chronological order. This could be a P45, P60, or payslips. Preferably the last payslip you received within the tax year from each of your employments as this should contain a year-to-date figure of your income and your tax paid
A copy of form P11D showing benefits in kind (company car/medical insurance etc.) provided to you in connection with any employment during the year
Details of any Company Directorships and income earned from these Directorships
Details of any other income arising during the year, including Share Dividends received
Details of rents received and expenses in respect of any let properties (ALSO overseas)
If you received a state pension amount in the year, together with the current rate of payment
Details of any other pensions received in the year. This includes overseas pensions
Details of interest received from bank and building society accounts
Dividend counterfoils and similar vouchers for fixed interest stocks
Chargeable event certificates on certain bonds and life assurance policies
Details of any Foreign Income
If you were not resident in the UK for the whole 12 month period, details of your domicile
Details of any “Chargeable Gains” such as profits made on shares sold, any land or property that you have disposed of or sale of a business
Details of assets purchased or sold in the year (For example – Cars, Computers, Office Furniture).
Forms R185/R185(Trust) showing your income and tax deducted in respect of any settlement of which you are a beneficiary
Certificate of interest paid in respect of any loan you may have obtained, or a new loan which you consider you may be entitled to, tax relief and details of the purpose of any new loan.
Details of any contributions you may have made to a pension scheme in the year
Details of payments under Gift Aid during the year
Details of charitable covenants paid during the year
Details of any gifts made where you have retained an interest in the asset or where you will derive a benefit from the asset
Details of any interest acquired in an asset that you wholly or partly funded at any time after 17 March 1986
Details of any other transactions which may affect your tax liability (including any tax refunds received, tax advance paid, Covid 19 Grants and, losses B/F and fixed assets register information)
Confirmation of Child Benefit entitlement and the amount actually received within your household

The above list covers the majority of items which may be taxable, or on which you may receive tax relief. It is unlikely that all the above items will be applicable to you. But it is also possible that there may be items that are not on the list that should be disclosed to HM Revenue & Customs.

In order to complete the tax return you will also need your:

UTR

(ie the unique ten-digit reference number that enables HMRC to identify you)

NI

National Insurance number

Once all data have been entered into your Self Assessment tax return, double-check it all before submitting it to HMRC. Also take extra care when ticking boxes, as this is where mistakes can also occur. More serious errors can lead to a penalty if HMRC believes they are the result of your being careless. Do not let it happen.

If the thought of completing your first Self Assessment tax return, or making your way through another one is all too much, you can always ask an experienced professional to do it for you, or at least check and correct, if necessary, your already completed tax return. It may be cheaper than you think!