Self Assessment Tax Return: Information Taxpayers Must Know

Suppose you have recently started a business as a self-employed property professional or are an employee whose taxes are not automatically deducted from the payslip. Understanding how to handle your tax obligations, specifically Income Tax and National Insurance contributions, is important.

Almost every individual in the UK must submit the Self Assessment Tax Returns. But that can be a daunting task, especially if you are unfamiliar with the process. Whether you are self-employed, have additional income, or need to report rental earnings, understanding the key information and deadlines is crucial to avoid penalties and ensure accurate filings. That is why you must know the ins and outs of the tax return process.

What is Self Assessment Tax Return?

Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect tax from people whose income isn’t automatically taxed. An individual pays taxes for the income earned between 6 April of one tax year and 5 April of the next tax year. For instance, as a self-employed person, you will need to file a Self Assessment Tax Return each year. You must complete and pay the returns of the Tax Year 2023/24 for the period between 6 April 2023 to 5 April 2024.

In simple words, Self Assessment is how self-employed individuals, and sole traders can report and pay tax on their income. The current tax year for Self Assessment covers 6 April 2023 to 5 April 2024.

Do You Need to File a Self Assessment Tax Return?

You need to file Self Assessment Tax Return if the following apply to you in the last tax year spanning from 6 April 2023 to 5 April 2024:

• Your total taxable income was over £150,000
• You were a partner in a business partnership
• You were self-employed as a sole trader and made an income of more than £1,000 before taking any amount off to claim tax relief on
• You had to pay Capital Gains Tax (CGT) on the chargeable gains you made during the disposal of property, land or asset You had to pay High Income Child Benefit Charge

You also need to file a Self Assessment Tax Return if you have untaxed income like the ones stated below:

• Income from renting out a property or land
• Tips and commission
• Income from savings, investments and dividends
• Foreign income

When Is the Deadline to Submit Your Self Assessment Tax Return?

The deadline to submit your Self Assessment Tax Returns depends on your choice of filing. If you choose to file your Self Assessment Tax Return on paper, you have to submit your returns by 31 October. For this, you can either download and print the SA100 form and any additional pages from GOV.UK or order paper forms by calling HMRC at 0300 200 3610.  Preparing and submitting your return early is important because registering and obtaining your Unique Taxpayer Reference (UTR) from HMRC can take about 20 days or longer if the agency is busy. It would be best to inform the HMRC because the forms come by post.

If you file your Self Assessment Tax Return online, your deadline for submission is 31 January. For this, you must first register for HMRC's online services. That can take up to 10 working days. Once registered, you can log in to your personal tax account and complete your return online. Filing online has many advantages like:

• Getting an extra three months to file
• Access to 24-hour online services
• Automatic tax calculations
• The ability to view previous details

What Information Do Property Investors Need to Include on Your Self Assessment Tax Return?

If you are a property investor and are declaring taxes on your property income, these are the details you need to provide:

• Detailed break-down of rental income and expenses from all your properties
• Mortgage statement for the tax year showing all the interest, arrangement fees and other financial costs
• If you took a new mortgage or re-mortgaged any properties during the tax year, please also provide an offer letter of the mortgage
• Statements from an estate agent, if properties are let out via the letting agent
• If you have carried out any major repairs or refurbishment during the tax year, please provide the full details of the work together with the invoices

Conclusion

As a UK taxpayer, filing the Self Assessment Tax Return can be daunting, especially if it is your first time. That is why it is best to contact professionals and experts. Missing the specified deadlines can lead to hefty fines and HMRC investigations.