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8 Days to go until the 31st January 2022

Here at Jaccountancy Headquarters, we are ready to tackle the final week of January and the final week before the self assessment deadline.

Late Penalties will not be issued if the return is done before the 28th February however interest will be charged !

Jaccountancy thrives because we recognise the vital importance of a personal touch, taking the time to understand not just the business, but the business owner.

The more we understand our clients, their needs and challenges, the better we can please them with our products and services.

You have to submit your tax return by 31 January whether you’re a sole trader, in a business partnership, or run a limited company.

The Self Assessment deadline is earlier if you’re filing a paper return, on 31 October. – You file your tax return for the previous tax year.

So for tax year 2020-2021 the deadline for filing your return online and paying your bill is 31 January 2022.

 

Self Assessment Frequently Asked Questions

Self Assessment: what is it?

Self Assessment is the tax return process for self-employed people.

Whereas HMRC collects income tax from employees directly through the PAYE system, the self-employed need to work out their income and expenses and then pay their bill each January.

You might even need to complete a Self Assessment return if you’re not self-employed. For example, if you earn money from renting out a property.

You’ll also need to complete a tax return if you have significant income from savings, investments and dividends.

Sole Trader VS Limited Companies - What is the difference?

For sole traders and people in a general business partnership, you’ll declare your business earnings and allowable expenses on your Self Assessment, as your business isn’t a separate legal entity.

But when becoming a freelancer for example, you might choose to set up a limited company instead of being a sole trader.

Limited companies and limited liability partnerships are separate to you personally, and taxed through a Company Tax Return. But you’ll still usually have to send a personal tax return, including your salary and dividends received through the company.

Read our blog on Sole Trader Vs Limited Company here! 

Do I need to fill in a Self Assessment tax return?

HMRC says that you need to send a tax return and pay your bill through Self Assessment if in the last tax year you were:

  • a self-employed sole trader earning more than £1,000
  • a partner in a business partnership

You’re classed as self-employed if you run your business yourself and are responsible for its success or failure.

HMRC also says you might need to send a return if you have untaxed income from:

  • renting out a property
  • tips and commission
  • savings, investments and dividends
  • foreign income

HMRC has a tool you can use to check whether you need to file a Self Assessment tax return.

What information do I need for my Tax Return

For the self-employed, the key information is likely to be your income and expenditure details, so you should have all your invoices and receipts to hand.

There are costs you can deduct from your turnover to work out your total taxable profit. You can claim for things like officetravelmarketing and business insurance costs, as long as they’re used solely for your business.

It’s important to keep good records throughout the year. Not only does this make filling in your return easier, HMRC may check your return after you’ve filed and ask to see your records. You’re required to keep your records for five years after the 31 January deadline.

Read more about keeping accurate business records.

You’re likely to need details of:

  • employment income (if you’re also employed)
  • dividends
  • partnership income
  • interest
  • rental income
  • foreign income
  • pensions contributions
  • Gift Aid
  • pension income
  • payment on account
  • redundancy lump payment or unemployment benefit
  • P11D
  • capital gains

If you need to ask third parties (like banks and building societies) for information, make sure you leave enough time for them to give it to you.

You’ll also need your unique taxpayer reference number (UTR). You get this when you register for Self Assessment – find out more about your UTR number here.

If you need help with your records and filing, we recommend getting a Tide Account and Xero Software – you might want to consider taking out one of our Monthly Accountancy Packages – Click Here For Prices

How do I pay Self Assessment Tax?

Pay self-employed tax

When you submit, you should get a confirmation message and a reference number.

HMRC will calculate the tax you owe, as well as the National Insurance contributions you need to pay.

The deadline for paying your tax return is the same day as the deadline for filing – 31 January.

If you file your tax return late, you’ll get a £100 penalty (if it’s up to three months late – it’s more if it’s later).

That being said, the way that HMRC applies penalties is changing to a points-based system from 2022.

The fastest ways to pay your tax bill are:

  • online or telephone banking
  • CHAPS
  • debit or corporate credit card online (you can’t pay using a personal credit card)
  • at your bank or building society

Read our guidance on how to pay tax here!

Can Jaccountancy help with my Tax Return?

YES!

Jaccountancy can absolutely help prepare and submit your tax return using our commercial software which integrates into HMRC. Making sure you are claiming all the reliefs, allowances, deductions and ensuring accurate computations means that our clients will never over pay tax!

Clients pay exactly the right amount of tax at exactly the right time!

Click here to book in a no obligation chat about your circumstances