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Self-Assessment Tax Return: All Your Questions Answered

When it comes to your HMRC self-employed tax return as a sole-trader, you’ll have lots of questions about what it is, how to do it, and when it’s due.

We’ll answer all of your most commonly asked questions about self-assessment tax returns in this short article.

Let’s get started right away.

What is a self-assessment tax return?

The self-assessment tax return is HMRC’s way of working out how much tax and national insurance you owe when you’re self-employed.

Each year, you disclose how much income you made, the cost of running your business, and from there HMRC works out what you owe.

HMRC follows the financial year which runs from April to April.

The tax man relies on honesty and transparency for this system to work, but the system is open to manipulation. Because of this, HMRC imposes heavy fines for anyone they catch not doing everything above board.

Keeping the taxman happy is important, so make sure you do it.

Is the self-assessment tax return easy to do?

Filling out the actual form is straightforward (even more so since HMRC moved most of the process online).

In its most simple form, you give HMRC two numbers: money made and money spent.

However, it’s all of the work you need to put in to get to this number that can be tricky. It takes attention to detail and organisation.

Online bookkeeping platforms can help, but they still require regular upkeep.

If those skills aren’t your strong points, there are affordable alternatives to accountants like our Bookkeeping and Accounts service which can help.

When are self-assessment tax returns due?

If you’re in your first year of business, your self-assessment tax return is due no later than January 31st after your first tax year. You must also pay the bill by this deadline.

For example, if you started trading in November 2020, your first tax bill would be for the financial year April 2020 – April 2021. That would mean your tax return is due January 31st 2022.

From there, your tax return is due no later than January 31st

How do I tell HMRC I am self-employed?

Registering as self-employed is easy. You have two options when you’re starting out: sole-trader or limited company.

Sole-trader simply means there is no difference between you and your company. Registering and running a sole-trader business is far simpler than starting a limited company, but they both have their advantages.

If you’re unsure about which to choose, get in touch and we’ll help you.

Assuming the sole-trader route is best for you, you can register here. Don’t worry if you’ve already started trading. HMRC ask when you began trading, so you can backdate it up to a point (you must register as self-employed by the 5th October before your first tax return is due).

Do I need to tell HMRC I am self-employed?

Once you earn over £1000 from a new revenue stream, you should register for self-assessment.

This includes earning money from:

  • Renting property you own
  • Tips and commission
  • Income from investments, savings, and dividends
  • And any foreign income

Making money and not sure you need to tell HMRC? Use this tool to double-check.

Is there a self-assessment tax return form?

Download the SA100 form to submit your tax return by paper by 31st October and pay by 31 January.

Or submit your self-assessment tax return online.

Is there a self-assessment helpline?

There is, yes, but they’re extremely busy.

Since the information you’ll be discussing is confidential, the most secure way of getting their number is directly from HMRC.

Is there a self-assessment tax return course?

Your local business help centre may have a free course for you. These are often delivered by accountants who can answer any of your questions.

Alternatively, spend an hour chatting to us and we’ll tell you everything you need to know, specific to your business, about filling in your self-assessment return correctly and in a tax-efficient way.

Is there an easy way to do your self-assessment tax return?

The easiest way to do your self-assessment tax return is not to do it yourself.

Bookkeeping and accounting services take all the stress and pressure off your shoulders so you can concentrate on your business.

Accountants can be pricey but are often the best bet for anyone who has a limited company or complex income accounts.

Should you be a sole-trader and want someone to cast an expert eye over your books to make sure you’re claiming for everything you’re entitled to, and don’t want to spend hundreds of pounds a month, EMS: Bookkeeping have packages starting at £25+VAT per hour.

What kind of things can I claim as a business expense?

You can claim for things like your car, clothes, working from home, and start-up costs. The allowable expenses list is huge, with hundreds of potential things to claim for.

We’ve summarised things people forget to claim for which could save you hundreds off your self-assessment tax return bill. 

Learning everything you can claim for yourself is doable since not everything will apply to your business. We offer a one-off hour-long tax training session to give you specific advice to help get you started. 

Did we answer your questions?

If not, get in touch now and we’ll do our best to help you.

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