Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.
What is Self Assessment?
Most people have their tax collected by the PAYE (Pay As You Earn) system, where their employer or pension provider deducts tax and National Insurance on the behalf. But for some people the PAYE system doesn’t work – for example, if they are self-employed or if they have more than one income stream. This is where Self Assessment comes in – Self Assessment is the method that HMRC uses to collect tax and National Insurance from those people who aren’t covered by PAYE. Under the Self Assessment system, the person is expected to fill in a tax return which reports all of their income (and allowable expenses which can be offset against their tax bill). HMRC then calculates their tax bill.
If you need to send a tax return, you send it after the end of the tax year it applies. So, if you need to send a tax return for tax year 2017/18, you won’t be expected to send it until after 5th April 2018 once the tax year has finished.
You can send your tax return as a paper form by post or you can set up an online Self Assessment account to return your account online, which is probably the easiest way these days.
You have to make sure you have sent your Self Assessment tax return by the deadline, which is 31st January for online filing. If it is late for any reason, you will be issued with a penalty by HMRC. If you didn’t need to send a tax return last year, you also need to make sure you allow enough time because you will have to register with HMRC first and this could take up to 20 working days for all of the necessary information to arrive by post. There are different ways to register with HMRC, depending on whether you are self-employed or a sole trader, not self-employed or registering a business partnership.
You will need to make sure you keep adequate financial records (such as banks statements, invoices and receipts) to help you fill in your tax return correctly as well as support your tax calculations. While HMRC don’t ask to see the accompanying paperwork for each and every tax return, the important thing to remember is that they can ask to see it if they wish and they can issue penalties if you haven’t kept adequate financial records.
Once you have sent your Self Assessment tax return, HMRC will calculate how much you owe in Income Tax and National Insurance. You need to pay your Self Assessment tax bill by 31st January (or even earlier if you want HMRC to collect what you owe automatically from your pension or wages). How much you will owe will all depend on which Income Tax band you are in. Capital Gains Tax is taxed at a different rate, if you are liable to pay any.
Will you need to send a Self Assessment tax return?
Not everyone has to send a Self Assessment tax return. If you are employed by an employer, don’t have a very high salary and don’t have any other form of income then it is highly likely that all of the tax you owe will be collected through the PAYE system and there will be no need for you to send a tax return.
If any of the following apply to you in any given tax year (6th April to the following 5th April) then you will have to complete and send a tax return:
- You are self-employed (you are allowed to deduct allowable expenses to lower your tax bill)
- You received more than £2,500 in untaxed income – for example, if you have a job where you receive tips or you have rented out property. If the income was less than £2,500 you need to contact the HMRC helpline on 0300 200 3300 (textphone 0300 200 3319) for guidance
- You received income of £10,000 or more before tax from your savings or investments
- You received income of £10,000 or more before tax from share dividends
- You are a company director and you don’t receive any pay or benefits such as a company car or private medical care. This doesn’t apply if you are a company director for a non-profit organisation such as a charity
- If you made a profit from selling any of your assets, such as shares, valuable antiques or a second home – if you made a profit from selling chargeable assets, you could be liable for Capital Gains Tax
- You or your partner had an income of more than £50,000 and one of you receives Child Benefit
- You had income from abroad which you need to report and pay tax on
- You lived abroad and received an income from UK sources
- Your taxable income was over £100,000
- You are a trust or registered pension scheme trustee
- You received a P800 from HMRC informing you that you hadn’t paid enough tax in a previous tax year and you haven’t paid what you owe through a tax code change or by voluntary payment
- Your State Pension was more than your personal allowance and was your only source of income. This only applies if you started getting your pension before 6th April 2016
- You are a religious minister
- You are a Lloyd’s underwriter
If your only income is from your wages or pension, you most likely won’t need to send a tax return but if you’re not sure, you can check online.
What happens if HMRC have told you that you need to send a tax return?
It could be that HMRC will email you or send you a letter stating that you need to complete and send a Self Assessment tax return, even if you didn’t realise you needed to. If this happens to you, you really need to make sure you send a tax return even if you think you have no additional tax to pay. If you fail to send a tax return that HMRC has requested, you could be hit with a penalty.
If you used to send tax returns but no longer need to, you can contact HMRC and ask them to close your Self Assessment account.
If you used to be self-employed and no longer are, you need to inform HMRC. They will assume that you are still self-employed and need to send a tax return unless you inform them otherwise.
You can contact the Self Assessment office at HMRC by calling 0300 200 3310 (textphone 0300 200 3319) but make sure you have your UTR (Unique Taxpayer Reference) and National Insurance number to hand when you call.
What happens if you want to claim tax relief?
You will need to send a tax return if you want to claim money back from HMRC for any of the following:
- Charitable donations
- Work expenses of more than £2,500. If your expenses are less than £2,500 and you don’t need to send a tax return for any other reason, you need to contact the HMRC helpline instead on 0300 200 3300 but make sure you have your National Insurance number to hand
- Private pension contributions if you are an additional or higher rate taxpayer or if your pension scheme isn’t set up for automatic tax relief
How do HMRC know that you need to send a Self Assessment tax return?
You need to inform HMRC by registering for Self Assessment. You will need to do this if you didn’t send a tax return last year, even if you have been registered for Self Assessment in the past. There are different methods of registering for Self Assessment, depending on whether you are self-employed or a sole trader, not self-employed or registering a business partnership or as a business partner. You will need to make sure you keep adequate financial records to support your tax return.
How do you send a tax return?
There are a number of ways you can send your completed Self Assessment Tax return to HMRC. The quickest and easiest way is to use the free online Self Assessment service. You can complete your tax return online and you have the ability to save your progress and return to it so you don’t have to complete it all in one go.
If the online service isn’t for you, you can also send a paper form or use a tax software program to complete and send your Self Assessment tax return.
There are some groups of people who can’t use the online service to send their Self Assessment tax return and must find another method. If you are completing and sending a tax return for any of the following, you will be unable to use the online service and must use a paper return or software program:
- Trusts and estates
- People who receive income from a trust
- People who live abroad as a non-resident of the UK
- People who are Lloyd’s underwriters.
If you are a trustee of a registered pension scheme, you must use a paper form to send your tax return.
What are the deadlines for sending a tax return?
If you are required to submit a Self Assessment tax return, make sure you take good note of the deadlines – HMRC take them very seriously and hand out penalties if you miss the deadline, even by just one day. The deadlines apply both to submitting your tax return as well as paying what you owe to HMRC.
The deadlines are as follows:
|Registering for Self Assessment if you are self-employed, not self-employed or registering a business partnership or as a business partner||5th October|
|Paper tax returns||Midnight on 31st October|
|Online tax returns||Midnight on 31st January|
|Paying the tax you owe||Midnight on 31st January|
|Making advance ‘Payments on account’ payment date in addition to 31st January (half to be paid in January, half to be paid now)||Midnight on 31st July|
If you submit your tax return late or fail to pay your tax bill on time, you will usually be issued with a penalty (and interest payments for unpaid tax). If you have what HMRC considers to be a reasonable excuse you will be able to appeal any issued penalties.
Are there any different deadlines?
The above deadlines apply to most people who will need to send a Self Assessment tax return but there are a few other dates to keep in mind.
If you want HMRC to automatically collect any tax you owe from your wages or pension, you need to submit your online tax return by 30th December. Not everyone is eligible to do this – to be able to pay your tax bill in this way, you need to owe less than £3,000, already pay tax through the PAYE system and have submitted your tax return by the appropriate deadline (31st October for paper tax returns). If you are eligible and you have submitted your tax return on time, HMRC will collect any tax you owe through your tax code.
If you are the trustee of a registered pension scheme or a non-registered company, HMRC need to have received your paper tax return by 31st January. If this applies to you, you must send your tax return in paper form as you aren’t allowed to send an online tax return.
HMRC may write to your or email you to inform you of a different deadline – make sure that you keep to that deadline.
There are different deadlines for partnerships if one of the partners is a company, rather than an individual. These deadline all depend on the accounting date of the partnership, which means that if one of your partners is a limited company and the partnership has an accounting date between 1st February and 5th April, an online tax return is due 12 months from the accounting date (9 months for a paper return).
If the tax return is for a tax year other than the most recent one to have ended, the deadline has been missed so you need to get your tax return to HMRC along with payment for any tax due as soon as possible and it is very likely you are going to have to pay a penalty as well.
What are the penalties for late filing or payment?
It’s really important to keep an eye on the deadline dates – if you miss the deadline for filing your Self Assessment tax return by just one day you will get an automatic penalty of £100. If your tax return is 3 months or more late, that penalty increases. HMRC also issues penalties for failing to pay your tax bill on time.
If you have submitted your Self Assessment tax return late or haven’t paid your tax bill on time, you can get an estimate of how much you are going to be expected to pay in penalties and interest.
If you feel you have a reasonable excuse for missing the filing or payment deadlines, you can appeal against a penalty. Circumstances which HMRC considers to be reasonable include the death of a partner or close relative shortly before the deadline, suffering from a serious or life-threatening illness or delays due to a disability you have. They don’t consider a bounced cheque, mistakes on your tax return or you finding the online service too difficult to use to be reasonable excuses.
If a partnership tax return is late, all partners can be charged a penalty not just the nominated partner.
Can you change your tax return once it has been submitted?
What can you do if you have submitted your tax return and then realise days later you have made a mistake? Fortunately, you do have the opportunity to make a change to your tax return once you have filed it. The deadlines for making changes are as follows:
- 31st January 2018 for the 2015/16 tax year
- 31st January 2019 for the 2016/17 tax year
- 31st January 2020 for the 2017/18 tax year.
If you miss these deadlines and you still need to make changes, or you want to make a change to a tax return for a previous tax year, you will need to write to HMRC with details of the change you need to make. Your tax bill will then be updated based on the new information you report to HMRC, which might lead to more tax to pay or alternately, you might be able to claim a tax refund.
The way in which you make changes to a tax return depends on how you filed the Self Assessment tax return in the first place. If it was an online tax return, you can log into your HMRC Self Assessment account and select the ‘Tax return options’ option to select the tax year you need to make changes for. All you need to do then is make the corrections and refile the tax return.
If you originally filed a paper return, you need to download a new tax return form and send the corrected pages to HMRC. So that HMRC are aware that you are correcting a previous tax return, make sure you write ‘amendment’ on each page and include your name and UTR. You then need to send this to the usual address you usually send your Self Assessment tax return to. If you can’t find this address, send to the address for general Self Assessment enquiries instead, which is:
HM Revenue and Customs
If you used a tax software program to submit your tax return originally, you need to contact your software provider to find out how to make changes to past tax returns. If your software doesn’t allow you to make corrections, you will need to contact HMRC on 0300 200 3310 (textphone 0300 200 3319) for guidance.
If the change you need to make relates to a tax year up to or before 2014/15, you will need to write to HMRC with details of the changes you need to make. You will need to include the following details in your letter:
- The tax year you need to correct
- Why you think the tax return was wrong and whether you think you have paid too much or too little tax
- How much you think you have overpaid or underpaid by
If you want to claim a tax refund on previous Self Assessment tax returns, you have up to four years after the end of the tax year it relates to. If you are claiming a tax refund, you also need to include the following information in your letter to HMRC:
- That you wish to make a claim for ‘overpayment relief’
- Proof to show that you paid tax through the Self Assessment system for that relevant period
- How you want to be repaid
- That you haven’t already tried to reclaim this amount
- A signed declaration that the details you are now providing and correct and complete to the best of your knowledge.
How long does it take for your tax bill to be changed?
If you are updating your bill through the online service, you should see the amended bill straight away. Within 3 days your personal tax statement should show the difference between your new and old bill, including whether you owe more or less tax. It will also show whether you owe any interest to HMRC.
If you are owed a tax refund, you can claim a refund by selecting ‘Request a repayment’ from the menu in your online account. You should receive the refund into your bank account within 4 weeks. If you owe tax within the next 35 days (if, for example, you are due to make a payment on account within 35 days) you might not get a refund and instead the amount of the refund might be deducted from the tax you owe instead.
If you owe more tax, your updated statement will show what date that tax needs to be paid by and the effect it will have on any payments on account you are due to make.
If you sent your updated return in paper form, HMRC will send you an updated bill within 4 weeks. If you are due a refund, they will pay it straight into your bank account if you included your bank details on your form.
Can you get help with your Self Assessment tax return?
We know that many people find Self Assessment tax returns complicated and difficult but there is help available to help you get through it. You can appoint someone to take care of your Self Assessment tax return on your behalf, such as a friend or relative, or a tax agent. Our team of experts will be happy to assist you to get help – give our friendly team a call on 0330 122 9972.
If you are struggling with certain aspects of your Self Assessment tax return, you can get guidance on the GOV.UK website (as well as on our own website) on issues like Capital Gains Tax; expenses and benefits; the High Income Child Benefit Charge; tax on rental income, savings interest and foreign oncome as well as tax returns for business partnerships.
There are also a number of HMRC help sheets, as well as guidance notes for each section of the tax return to help you fill in that section.
Do you need to fill in a Self Assessment tax return for someone who has died?
Although it might seem hard, HMRC expects you to report deaths to them as soon as possible, if you are responsible for sorting out the tax affairs for the deceased. HMRC will then inform you whether you need to complete a tax return on behalf of the deceased.
Because it is recognised that it can be a distressing thing to have to inform organisations of a loved one’s death, the government has introduced the Tell Us Once service – if you use this service to inform government agencies of the death of someone, once you have notified the service, they will inform HMRC along with a number of other government agencies such as the Department of Work and Pensions (DWP), the Passport Office, the DVLA and the local council.
If you choose not to use the Tell Us Once service, you will need to notify HMRC yourself. You will need the following information:
- The date of death
- The name and address of who to contact about the deceased’s tax affairs
- Any of the following for the deceased so their tax affairs can be identified: their National Insurance number; their UTR (Unique Taxpayer Reference); their full address or their last employer or pension provider’s name and address.
How do you fill in a Self Assessment tax return for a deceased person?
You will need to use the financial records of the deceased to fill in the tax return – exactly what information you need will depend on the circumstances of the deceased. You will need details of the following to help you complete the tax return:
- Bank statements or building society pass books
- Dividend vouchers for any investments they may have had
- National Savings bonds or certificates
- Work or pension payslips to show income and tax deducted
- Details of any expenses they received from their employer
- Confirmation of any State Pension they may have received
- Business records, if the deceased ran their own business or rented out property.
If you are struggling to complete a tax return for a deceased person, or you can’t find their records, you can contact the HMRC Bereavement helpline on 0300 200 3300 (textphone 0300 200 3319). Lines are open between 8am and 8pm Monday to Friday, 8am to 4pm on Saturday and 9am to 5pm on Sunday.
You can contact HMRC to register to submit a tax return online on behalf of the deceased person. Self Assessment tax returns can also be sent by post. The deadlines for submission depend on the method you choose to submit the tax return and are the same as for any other Self Assessment tax return. If you need to, you are allowed to hire a professional (like a tax accountant) to submit the tax return on behalf of the deceased.
What do HMRC need to know about the ‘administration period’?
After someone dies, there is a period of time known as the ‘administration period’, which is the time between the day after the death and the date the deceased’s estate is settled (otherwise known as distributed). If you have been nominated to the executor or administrator of the deceased’s estate, you will need to send HMRC information about this ‘administration period’. What information you need to send to HMRC all depends on the size of the estate and the money that came from it during the administration period.
You might need to send a tax return for the administration period of any of the following circumstances apply:
- The estate was worth more than £2.5 million at the date of death
- In the current tax year, more than £500,000 came from the sale of the assets of the estate by the executors or administrators of the estate
- In any tax year ending before April 2016, more than £250,000 came from the sale of the assets of the estate by the executors or administrators.
- The total Income Tax and Capital Gains Tax due for the administration period is greater than £10,000
The tax return is for the estate, not the deceased, and is separate from the tax return you need to send on behalf of the deceased.
If you want to send the tax return for the estate online, you will need to register the estate online first. You need to register by 5th October of the tax year you are sending an estate tax return for. To register for online tax returns, you will need an ‘organisation’ Government Gateway account and you will need to set up a new organisation account for each estate you need to register. You will also need a National Insurance number – you won’t be able to use a temporary reference number. You will get a UTR (Unique Taxpayer Reference) for the estate through the post within 15 working days and you will need this UTR to be able to send the tax return.
Once you have the UTR for the estate, you can either send the tax return as a paper form using form SA900 and post it to HMRC by 31st October following the tax year it applies to. If you want to send the tax return electronically you will need to purchase tax return software to allow you to do this – if you are submitting the tax return in this method you have until the 31st January deadline to do so.
After you have submitted the tax return, HMRC will inform you of how much tax the estate owes – make sure you pay the tax bill by the deadline. HMRC will levy penalties and interest payments against an estate in the same way they would against an individual for missed deadlines.
What if you don’t need to send a tax return for the deceased?
If the deceased’s circumstances are such that you don’t need to send a Self Assessment tax return on their behalf for the administration period, you can make ‘informal arrangements’ with HMRC instead. To do so, you need to write to HMRC and inform them of the following information:
- The Income Tax and Capital Gains Tax owed for the administration period
- The name, address, National Insurance number and UTR of the deceased
- Your name and contact details
You send this information to the following address:
Pay As You Earn and Self Assessment
HM Revenue and Customs
HMRC will then send you a payment slip showing how much tax needs to be paid and by what date.
How can DSR Tax Claims help?
We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful. Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax relief. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.