An annual self assessment return is needed from anyone who is self-employed or who has received any taxable income from outside their full or part time jobs. This includes income from inheritance and rentals. If you are registered as self employed you usually receive a letter informing you that you need to complete a tax return for that financial year. At present Self Assessment returns are completed and filed online. From 2020 the process of moving to Making Tax Digital is anticipated (maybe!). We can help you navigate the confusing questions and go through the checklist of all the information you need.
What is it? Will it apply to me? How do I register? What do I report? Can Bookkeeping Synergy do this for me?
What is a Self-Assessment?
Self-Assessment is a system that HM Revenue & Customs (HMRC) uses to find out how much Income Tax and National Insurance you need to pay on any income which isn’t taxed at source. This is usually for self-employed workers, or for some other types of income, such as pensions or income from savings and investments.
Self-Assessment returns completed for (say) the tax year 06 April 2019 to 05 April 2020, are filed and paid for yearly with HMRC before the deadline of 31st January. If your tax liability is over £1,000 you will be required to make a payment on account the following 31st July. Penalties are incurred if filing deadlines are not met.
Will it apply to me?
As a general rule, anyone who receives income that isn’t taxed at source needs to complete a Self-Assessment. This includes sole traders, Limited Company directors, Partners in partnership and applies to pension income, savings and dividend income, profits from furnished property lets, rental income and benefits in kind. If you or your partner earn more than £50k and receive Child Benefit you would also be required to complete a return.
The complete list of who needs to complete a Self-Assessment is available online following the this link https://www.gov.uk/self-assessment-tax-returns
How do I register for Self Assessment?
If you meet any of the criteria (check on the website above) that mean you need to complete a Self-Assessment, the first step is to register. You need to do this by the 5th October after the end of the relevant tax year. For the tax year that ran from 6th April 2019 to 5th April 2020, the deadline for registration is 5th October 2020.
Registering for Self-Assessment isn’t an automatic process when you set up a Limited Company or register as self-employed, so you’ll need to notify HMRC of your situation. You can do this online https://www.gov.uk/log-in-file-self-assessment-tax-return
What do I report?
You would report all untaxed income along with any expenses incurred. Expenses can include stock, office bills, bookkeeping and accounting fees, sub-contractor payments, marketing and advertising costs, training for continued professional development, travel including fuel, parking and train fares But some things are not claimable and these include journeys to and from your place of work, clothing which is not branded uniform, entertaining clients. HMRC also have a list of simplified expenses for items such as mileage and home office.
Please contact our team who will be happy to assist in the completion of your return.
Welcome to Bookkeeping Synergy, we are a team of professional, certified bookkeepers, offering cloud bookkeeping services for micro, small, and medium-sized businesses in Horley.
Our approach is practical and friendly and provides our clients with the information necessary to better understand their business and make well-informed business decisions.
One of the benefits of choosing Bookkeeping Synergy as your preferred bookkeeping service is that all our bookkeepers are local, experienced and have grown a passion for building relationships with local businesses.
We continually carry out reviews of your account to ensure that your business operations are run in the most tax-efficient manner.
Xero describes itself as 'beautiful accounting software' - we agree! It has brought our work right up to date with current technology and pressing forward. Try their mobile app, daily Bank Feeds, and integrations - your former idea of bookkeeping will be turned up side down!