What is Self Assessment?
“Self Assessment” is how HM Revenue and Customs (HMRC) refers to its system for collecting Income Tax. You’ll almost certainly be required to submit Self Assessment Tax Returns (SATRs) if you’re self-employed as a ‘sole trader’, a partner in a business partnership, or a company director. My tax return service is based in Keighley, West Yorkshire – a cloud resource you can access any time, anywhere.
Tax is usually deducted automatically from wages, pensions and savings. However, people with income from self employment, property and other sources must report it in a tax return. If you’re unsure, the HMRC checking tool will tell you if you need to send a return for the last tax year.
The tax year or fiscal year starts on 6 April and runs for 12 months to 5 April in the following year. You normally have until midnight 31 January to file your return online and pay any tax you owe from the previous tax year. However, preparing to submit your return early is time well spent because –
- You can put money aside for your tax bill.
- If you’re entitled to a tax rebate you’ll receive it sooner.
- You’re less likely to incur a late filing penalty.
- You’ll have more time to correct any errors.
Certain business running costs are classed as Allowable Expenses and can be deducted from your gross profit to calculate the taxable profit. Tax Allowances determine the amount of income you can earn before paying tax. You can claim Tax Relief on pension contributions and other eligible payments you make.
Tax rules change regularly; it takes time to understand them and skill to apply them correctly and efficiently. Mistakes can be costly and the effort you spend on getting your SATR right could be used more profitably. Hiring a professional is an investment that will save you time and money in the long run.
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My Accounting Emails are for business owners who want a better understanding of their financial position. They’ll help you manage your cash flow and stay in the black.
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