19th December 2019

What you need to know about filing a self-assessment tax return

Who Needs to Complete a Tax Return?

If you are an employee, you get taxed through your payroll.  When you receive your pay slip, the tax & NIC’s have already been deducted on your behalf.  You may also receive dividends, if you have shares in a company – at the moment, you are allowed a personal allowance of receiving £2,000 tax free dividends – anything above that will need to be declared on your self-assessment tax return.

Your income is categorised into various types  – employment income, dividend income, rental income, interest received on savings, capital gains and self-employed income.  Some of these forms of income are already taxed at source (for example, your employment income and sometimes interest received on savings.) Other forms of income are not taxed at source, hence the need to complete a self-assessment tax return.  The below list details when you need to complete a tax return:

  • your self-employment income was more than £1,000
  • you rent out a property
  • your income from savings or investments was £10,000 or more before tax.
  • you need to pay Capital Gains Tax on profits from selling things like shares or a second home.
  • you’re a director of a company and you are taking un-taxed income from it (unless it was a non-profit organisation, such as a charity)
  • you, or your partner’s, income was over £50,000 and you’re claiming Child Benefit
  • you have income from abroad you need to pay tax on, or you live abroad but have an income in the UK
  • your taxable income was over £100,000
  • your State Pension was more than your personal allowance and was your only source of income
When Should You Tell HMRC?

You should tell HMRC within 3 months if you begin receiving un-taxed income.  HMRC can impose a penalty for late notification, although, in our experience, this rarely happens.  It is important to notify them as soon as you can because you will need a UTR (Unique Tax Reference) in order to complete a tax return.  This is your unique personal ID with HMRC.  Registration can be completed online on HMRC’s website but it can take a few weeks for the UTR to be sent out.  So if your tax return is submitted late, then you will be fined.  You can still file paper tax returns at the moment – these must be submitted by 31st October.  If you file online, the deadline is 31st January both for the submission and the payment of any tax owed.

What Information Will I Need?

Filling in a self-assessment tax return can seem very daunting, especially if you’ve never completed one before. The key is to be organised and have everything you need before starting. We’ve compiled a list of information you need first:

  • Your National Insurance number
  • P60 or P45 for the year showing how much income you have already paid tax on
  • Contributions to pensions or charities that might be eligible for tax relief
  • Unique Taxpayer Reference (UTR)
  • All un-taxed income for the tax year (including self-employment, dividends and rental income)
  • Expenses relating to self-employment or rental
Penalties for Late Filing

If you miss the 31st January deadline for filing your tax return, you will receive £100 penalty.  If you are 30 days late, you are charged 5% of the tax due.  If you are 3 months late, you receive a penalty of £10 per day up to £900.  If you are 6 months late, you are charged a further £300 penalty and another £300 penalty if you are 12 months late.


Check out our blog here on which expenses you can claim on your tax return for sole traders.