Self Assessment
Tax Return Service

Online registry is the quickest and easiest option. Simply set up a Government Gateway account at the Gov.uk website, and you'll be supplied with a Unique Taxpayer Reference number (UTR) within ten days. You'll need this number when you complete your tax return, so keep it safe.

When you register, make sure you have your NI number and details of your income sources. Once this is done, you'll be a self-employed person!

You can also register by phone (be prepared for a lengthy wait in the queue!) or by post when you download the SA1 form from the HMRC website.

The first step is collating all the documents and data you need. This includes items like:

Income

• Sales Revenue - Collect the documentation for all sales made throughout the tax year, including sales invoices, receipts, and sales logs. This includes cash sales, credit card sales, and any online transactions.
• Bank Statements - Review your business bank statements carefully, identifying all income received, such as customer payments, bank transfers, bank interest, and government grants or benefits.

Other Taxable Incomes - If you have other income sources outside your core business activities, add them to the list. These could include property income, dividends from investments, employment income, or royalties.

Not all business expenses are eligible for tax deductions. It's crucial to understand HMRC's guidelines and only claim expenses that are 'wholly and exclusively for the purpose of your business'.

Organise your receipts and invoices into relevant categories, such as:

• Office Expenses - Rent, utilities, stationery, equipment rentals, phone and internet bills.
• Travel Expenses - Mileage covered for business trips, public transport fares, and overnight accommodation costs.
• Marketing and Advertising - Costs associated with promoting your business, such as website maintenance, social media advertising, and printing flyers.
• Professional Fees - Accounting fees, legal fees, and industry association memberships.
• Clothing and Equipment - Costs of uniforms, tools, and equipment specific to your trade, with depreciation considerations for larger purchases.

• National Insurance (NI) Number
• UTR Number

Online filing is the preferred method by HMRC and offers several advantages:

• Faster and more efficient - An online tax return allows immediate submission and eliminates the need to post paper forms.
• Secure and convenient - The HMRC online portal provides a secure environment to access and manage your tax return.
• Automatic calculations - The online system automatically calculates your tax liability based on the information you provide, reducing the risk of errors.
• Easier record-keeping - Online filing allows you to upload digital copies of your supporting documents, making record-keeping more accessible.

Online tax returns must be submitted by January 31st of the current tax year.

Paper filing, while not recommended by HMRC, remains an option for those who:

• Don't have reliable internet access.
• Prefer a physical copy for reference.
• Are uncomfortable using online platforms.

Important Note: paper tax returns must be submitted by the October 31st deadline to avoid penalties.

The self-assessment tax return form consists of various sections requiring specific information:

• Personal Details - Confirm your name, address, contact information, and NI number.
• Self-Assessment Income - Declare your total taxable income from your sole trade, including sales revenue, bank deposits, capital gains, and other relevant sources.
• Tax Deductible Expenses - List all allowable business expenses incurred throughout the tax year, categorising them appropriately (e.g., office costs, business expenditure, travel expenses, marketing).
• Capital Allowances - Claim depreciation on business assets like equipment and machinery, following HMRC guidelines. Understanding capital allowances for equipment and assets can be complex. Your dedicated accountant can advise on the correct claims and maximise tax relief.
• Trading Losses - If your business made a loss, you may be able to claim tax relief against future profits.
• National Insurance Contributions - Calculate and declare the Class 2 and Class 4 NI contributions applicable to sole traders.
• Tax Credits - If eligible for tax credits based on your circumstances, claim them in the designated section.
• Tax Calculation - The form will automatically calculate your tax liability based on the information provided. You might need to pay additional tax or be entitled to a refund.

• Class 2 is a flat-rate contribution that applies if your trading profits are between £6,725 and £50,270 (as of April 6th, 2024) for the tax year. The amount you owe is automatically calculated within the self-assessment return based on your declared profits.
• Class 4 is a percentage-based contribution on your trading profits exceeding £12,570 (as of April 6th, 2024). The rate is 9% on profits between £12,570 and £50,270, and 2% on profits exceeding £50,270. The self-assessment system calculates this based on your declared profits.

• Spreading the Burden - This system helps avoid a large tax bill at the end of the tax year by allowing you to spread out the payments throughout the year. This can be particularly beneficial for seasonal businesses whose income fluctuates.
• Avoiding Penalties - By making these advance payments, you're less likely to incur penalties for late or underpaid tax at the end of the tax year.

• Not Everyone Qualifies - You might not be required to make payments on account if your previous year's tax bill was below £1,000 or if you paid more than 80% of your tax liability through PAYE (Pay As You Earn) or other deductions.
• Adjusting Payments - If your income is expected to be significantly lower than the previous year, you can contact HMRC to request a lower payment on account amount. However, be prepared to pay the difference when you submit your SA return.
• Balancing Payment - Once you file your final SA return, your actual tax liability for the year will be calculated. If the total tax owed is higher than the payments on account already made, you'll need to pay a "balancing payment" by the following January 31st.
• Overpayments - If the payments on account and any withheld tax exceed your final tax liability, you'll be entitled to a refund from HMRC.

• Keep accurate records of your income and expenses throughout the year to ensure your estimated tax liability is accurate.
• Consider using accounting software or spreadsheets to track your income and expenses. This will make it easier to adjust your payment on account if necessary.

Sole trader self assessments are tax returns that individuals running their own business must file to HMRC, reporting their income and expenses for the tax year.

To register for self assessment as a sole trader, you need to notify HMRC about your business, after which you'll receive a Unique Taxpayer Reference (UTR) for filing your tax returns.

As a sole trader, you can deduct costs directly related to your business, such as office supplies, travel expenses, and business insurance, from your taxable income.

The deadline for submitting your online self assessment tax return and paying any tax owed is January 31st following the end of the tax year.

You can file your self assessment tax return online through HMRC's website using your Government Gateway account, ensuring you have all necessary financial records handy.

Missing the self assessment deadline can result in late filing penalties starting at £100, with additional charges accruing over time if the delay continues.