I was going to dive right into whether you need to register or not and then I thought I would just have a quick digress.
It can get confusing with terminology.
Self-assessment, personal tax, tax return, income tax – it all means the same. 😊 Why there are so many different terms to confuse you I do not know.
Anyway, back to it.
What is self-assessment?
Self-assessment is a HMRC term. You ‘self-assess’ all your income sources and work out how much tax you need to pay.
When you are registered for self-assessment you must complete annual tax returns declaring all your sources of income. The tax return will help you work out the personal tax and national insurance contributions that are due on your taxable income.
Do I need to register for self-assessment?
Self-assessment tax returns aren’t just for self employed business owners.
There are several different reasons why you might need to register for self-assessment. Bottom line is usually if you receive any untaxed income from any source this needs to be declared to HMRC on a tax return.
Some of the more common reasons are as follows;
- You are self-employed sole traders who has a turnover more than £1,000
- Limited company directors
- Company shareholders with more than £1,000 income from dividends
- Partners of general partnerships (just a quick note that the partnership also needs to be registered too)
- Members of limited liability partnerships (LLPs)
- Employees claiming expenses in excess of £2,500 in a tax year
- Any individual with an annual income over £100,000
- Anyone who receives rental income more than £1,000 from UK property or land
- Anyone who receives income from savings or interest above the tax free element
- Any UK resident who received foreign income
- If you receive child benefit and earn over £50,000
- If you receive any other untaxed income
There are some limited circumstances when you won’t need to however if any of the above apply to you and you aren’t sure you can get in touch to discuss you circumstances.
HMRC also have a tax return checklist to help to;
Check if you need to send a Self Assessment tax return – GOV.UK (www.gov.uk)
What do I need to do?
If you need to register for self-assessment, you must register by 5th October after the end of the applicable tax year.
For example; if you started receiving any of the income above between 6 April 22 and 5 April 23 then you must register with HMRC by 5 October 2023.
You will then need to complete your tax return by 31 January 2024. If you have any tax and national insurance due you will need to pay the liability by this date too.
There are different ways to register;
If you are self employed;
Register for Self Assessment: Register if you’re self-employed – GOV.UK (www.gov.uk)
If you are a partner;
Register for Self Assessment: Register if you’re a partner or partnership – GOV.UK (www.gov.uk)
If you need to register for any other reason;
Register for Self Assessment: Register if you’re not self-employed – GOV.UK (www.gov.uk)
If you don’t want to complete the registration yourself or don’t know where to start, then get in touch and we can assist.
Get ahead, get it done.
Get in touch if you would like support with completing your tax return.
Ask me for my FREE 22/23 Tax Return Checklist
Flo