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Do I need to file a Self Assessment tax return?

• 05 Jan 2022
• GoSimpleTax

This blog is just one of many resources IPSE provides for those seeking guidance and support on tax as a self-employed person. 

To find it all in one place, visit our Self-Employed Tax advice page.

Self-Employed Tax

 

More than 12m people file a Self Assessment tax return each year, which is almost a fifth of the UK population. They include sole-trader bricklayers, plumbers and plasterers, as well as hairdressers, cake makers and chefs, and self-employed tutors, translators and tattoo artists. People of all occupations, trades and backgrounds work for themselves.

Sole traders are key to the UK economy. They’re the unsung heroes who make up about 59% (3.5m) of the total UK business population of 5.9m and they of course include many freelancers, contractors and agency workers. If you’re one of these people, you might be wondering: do I need to file a Self Assessment tax return?

 

Many other people also need to fill out and file a Self Assessment tax return to report taxable income. This guide provides an overview of who must sign up to Self Assessment.

Here’s what we’ll cover

• Who must file a Self Assessment tax return?
• How to register for Self Assessment.
• Sources of advice and support.

Who must file a Self Assessment tax return?

Self Assessment is the system the UK tax authority HMRC uses to collect Income Tax. You need to register for Self Assessment and file an SA100 tax return if you:

• have earned more than £2,500 from renting out property
• or your partner have received Child Benefit and either of you has an annual income of more than £50,000
• have received more than £2,500 in other untaxed income (eg tips or commission)
• are self-employed (ie a sole trader) with an annual turnover of more than £1,000
• are a partner in an ordinary business partnership
• are an employee claiming expenses worth more than £2,500 a year
• have earned taxable income from savings, investments or dividends
• have earned income from abroad that is subject to UK tax (eg renting out a property overseas while domicile in the UK).

If you’re still not sure, HMRC provides an online tool that you can use to check whether you need to file a Self Assessment tax return.

Need to know!

• If you need to file a Self Assessment tax return, you do so after the relevant tax year ends on 5 April and you have until the following 31 January to file it online (although it’s best to do it sooner). First you must register for Self Assessment.

How to register for Self Assessment

It’s simple and relatively quick to register online for Self Assessment. When registering you’ll need to give your:

• National Insurance number
• full name (and any previous names)
• current address (and when you moved in)
• date of birth
• gender
• phone number
• email address and
• whether you’ve registered previously for Self Assessment.

You’ll also be asked for basic information about your new sole trader business, if that is what you’re doing. After you’ve completed the questions, HMRC will create an account for you. You’ll then receive a letter with your Unique Taxpayer Reference (UTR) number within 10 days (21 if you’re based overseas). You’ll need your UTR to file your Self Assessment tax return. You’ll also then receive another letter with an account activation code. Once activated, you can file your tax return online at any time before the deadline.

Need to know!

• Registration rules are slightly different if you’ve registered as self-employed before or if you’re not self-employed or if you want to register as a partner or partnership.

Sources of support

HMRC has published a comprehensive range of Self Assessment guidance, including concise YouTube Self Assessment videos and live and recorded webinars (registration required).

About GoSimpleTax

Income, expenses and tax submission all in one.

GoSimpleTax will provide you with tips that could save you money on allowances and expenses you might have missed.

The software submits directly to HMRC and is the solution for the self-employed, sole traders and anyone with income outside of PAYE to file their self-assessment giving hints and tips on savings along the way.

GoSimpleTax does all the calculations for you saving you ££’s on an accountant. Available on desktop or mobile application.