How to File Your Self Assessment Tax Return (UK) - Step-by-Step Guide

December and January are traditionally when many people in the UK prepare their tax return. So whether you're just starting to think about filing your tax return, or you've been procrastinating since April, our guide will help you to get organised and file on time!

Self Assessment: what is it?

In short, it's the UK personal tax return. It's primarily for those who aren’t taxed through PAYE, or have complex tax situations. It's a Self Assessment as the onus is on the tax-payer to provide the details to HMRC, rather than the employer.

Generally, it's a time consuming process involving HMRC's portal and customer service or it can be done with the support of an expensive accountant. In this step-by-step guide, we'll outline the process for filing a Self Assessment tax return in the UK.

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

If you have untaxed income, you likely need to file a tax return. The majority of filers are self-employed, landlords or individuals with capital gains, foreign income or residence topics to report to HMRC. If you're employed, you’ll be taxed through PAYE, (Pay-As-You-Earn), but you may also need to file if you earn over £100k in a tax year, incur the high income child benefit charge or if you want to claim relief through your tax return.

The recent Autumn Budget announcements mean that the dividend and capital gains allowance will decrease from April 2023 onwards, so more individuals may need to fill out a Self Assessment.

How to register for a Self Assessment tax return

If you fall under the above cases to file a Self Assessment, you will first need to register with HMRC. To register, simply use this link: https://www.gov.uk/register-for-self-assessment. The registration process is simple and takes around 10 minutes to complete. Once complete, HMRC will send you a UTR (Unique Taxpayer Reference). You’ll need this number in order to file your Self Assessment tax return.

What are the Self Assessment deadlines?

The UK Tax Year runs from 6 April to 5 April the following year. Generally, you need to register for Self Assessment by 5 October following the tax year, as if you leave it too late to register, you may miss the filing deadline and incur penalties. The filing and payment deadline is 31 January following the tax year.

So for the 6 April 2021 to 5 April 2022 tax year, you must file and pay the tax liability by 31 January 2023. If you do not file by 31 January, you’ll receive an immediate £100 penalty, with additional penalties being incurred as time goes on, as well as potential interest on the tax liability.

What information will I need to fill in a Self Assessment tax return?

So it's time to start filing your Self Assessment tax return! First and foremost, you will need to gather information about your income, expenses and assets. If you file with Taxd, we will ask you the relevant questions in order for you to file a compliant and tax efficient Self Assessment. Check below for your specific tax return page to find out the information you’ll need to collect.

What about specific pages on the tax returns?

Whether you're self-employed, employed, a landlord or have international tax matters, there's a tax return page for you. Understanding your tax return and what pages you need can be confusing, especially if you’re unfamiliar with tax jargon. This is where Taxd comes in.

We'll automatically apply the relevant pages to your tax return and complete it for you. So why wait? Let Taxd take the weight off your shoulders and help you to file your tax return as quickly and efficiently as possible.

Employment (SA102)

You will need a couple 'P forms' from your employer - the P60, (or P45), which will include all income and taxes paid. If you received benefits from your employer, (for example, private medical insurance), you can find the amounts to report on your P11D.

Depending on the type of job you have, there are certain expenses that may be eligible for tax deduction. We'll ask some questions so we can determine if this is the case for you and help claim back what's rightfully yours.

Self-employed (SA103)

If you’re self-employed, you have the perks of being your own boss. But just like any other business owner, you need to keep track of your income and expenses. Generally, you can claim anything as an expense that you use wholly and exclusively for business. Every job role is different, so there's no one-size-fits-all approach.

You can also claim back on expenses that have personal use by apportioning the cost - Taxd will handle this for you. We'll ask questions related to your industry so that we can determine the relevant deductions available to someone in your position.

UK property income (SA105)

Whether you’re renting out a room in your main home, an investment property or furnished holiday let, Taxd has you covered. Make sure to keep track of all the rental income and expenses so you can claim back what’s rightfully yours.

Although the rules surrounding mortgage interest has changed for higher (40%) and additional (45%) rate tax-payers, you can still claim interest as a 20% tax credit. Taxd will automatically populate the SA105 property income pages for you.

Capital Gains (SA108)

The tax-free allowance for capital gains is currently £12,300. If you made a gain above this, it needs to be reported to HMRC. This Capital Gains Tax (CGT) allowance is being reduced from April 2023 to £6,000. Capital gains can relate to a wide range of assets, from shares and cryptocurrency to property and antiques.

It's also worth noting that you might want to declare a loss on your tax return in order to offset future gains, which will make tax calculations much simpler. The rate at which CGT is charged depends on your other income sources, Taxd takes into account all relevant factors when calculating the final Capital Gains Tax liability.

Foreign Income (SA106)

If you have income from outside the UK, you need to complete the Foreign Income tax return pages. If you are a UK resident, you are taxed on worldwide income unless you claim to be non-domiciled, where you will only be taxed on income remitted, (brought into), the UK. Income from rental property, dividends and interest are all common sources of tax-free income for British individuals, but you could also have foreign employment or self-employment income that needs to be reported.

HMRC often work with worldwide tax authorities, so even if you have some interest accruing in a foreign bank account, you will need to report this to HMRC. If you've received a letter about your foreign income, don’t hesitate to get in touch with us. Taxd will ask about any foreign tax paid so that we can stay compliant with HMRC regulations whilst also avoiding being taxed twice in two countries.

Residence (SA109)

If you’re not a UK resident, you’ll only be taxed on income generated in the UK, such as rental income. If you’re a UK resident, you will be taxed on your worldwide income unless you are non-domiciled. There are various tests that determine your residence and Taxd will ask you the relevant questions to ensure you report an accurate tax return with HMRC. These pages cannot be filed online directly with HMRC so you will need to use a software like Taxd or an accountant, but this can get expensive with residence complexities.

Paying your Self Assessment tax bill

Once you've completed your Self Assessment tax return, you’ll know exactly how much tax you're responsible for. If you're due a refund, it will be paid into your bank account, or a cheque can be sent if you don’t have a UK bank account. You can pay tax liabilities online, by bank transfer or by cheque - full details here: https://www.gov.uk/pay-self-assessment-tax-bill. Make sure to pay by 31 January following the tax year to avoid penalty and interest charges. So, file your return ahead of time and worry about the payment later.

Can I pay my tax bill in installments?

Many individuals are surprised by their bill, so will choose to pay in installments to make things a little easier to digest. If you have filed your return and owe less than £30,000, you can set up a payment plan within HMRC. To be eligible for an installment plan, make sure to register and contact HMRC here: https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments

FAQs

Can I file my Self Assessment myself?

While it is possible to file your Self Assessment yourself, you’ll have to navigate HMRC's complex portal and customer service and you may be leaving money on the table. We recommend filing with software like Taxd - we’ll provide you with all the guidance and human accountant customer support necessary so you can file a stress-free, compliant and tax efficient Self Assessment tax return.

What is the best software for tax return preparation?

There are many software options available for tax return preparation, check out our blog on choosing a tax return software here.