How to file self-employment tax in the UK
Self-employment is easier said than done and comes with a lot of responsibility. You have to take care of your employees, manage your money, pay your taxes and file your tax returns. Individuals, whether self-employed or not, have to pay income tax regardless of their source of income. payment is required. However, self-employed individuals often do not file tax returns due to proper accounting procedures.
What steps do I need to take to file for self-employment tax in the UK?
1. Complete the self-assessment form provided by HMRC.
• You need to report your self-employment status to the tax authority by registering for self-assessment on the HMRC website.
• Keep in mind the deadline: You have until October 5th after the end of the tax year in which you registered for self-employment or faced penalties. Please note that the financial year starts from 6th April. So if you started working alone in February, you have eight months to register.
• Your UTR letter should reach you within ten days along with your 10-digit Taxpayer Reference Number (UTR). When it comes to paying taxes, you’ll need one.
• Your online account – HMRC will set up your online self-assessment account so that you can file your tax return when it is due.
2. Register for VAT.
• You can also register for VAT while you are in VAT. Consumers pay a value-added tax on most, but not all, products and services in the UK, which is currently set at 20%.
• If your taxable income exceeds £85,000 in any tax year, you must register with HMRC. If you earn less then it is completely up to you.
• You will receive a certificate confirming your TIN and important data to submit the first tax return and payment.
• It may take up to a month for the certificate to be delivered, during which time you will not be able to show or charge VAT on the invoice. You will still have to pay the tax collector. Inform your customers that you will charge more during this period and re-invoice after receiving your VAT number.
VAT registration gives you a better reputation and professionalism as well as more privacy when it comes to your income.
filing tax return
The tax return is divided into two parts. The main part which includes employment income, pension, charitable contributions and benefits. Additional pages for self-employment, real estate, investment benefits, company director status and those working abroad.
You have the option of filing your return online or on paper, but different deadlines apply. The government is also planning to phase out paper returns as part of its Making Taxes Digital initiative, which will start in April 2022.
How do I complete an online tax return?
Here’s our step-by-step guide to what that means and how to do it if you’re filing online:
• After logging in with your Government Gateway username, go to the ‘Enter your self-assessment’ page. While registering for online services for the first time, you will have to enter your UTR number only once.
• Make sure your personal information is up to date, such as your residence and marital status, as well as your date of birth, as this may affect your posts.
• Follow HMRC Guidance: The system is responsible for the information you provide, so any elements that are not necessary will be removed. You will not be able to progress until you answer the HMRC questions.
• Complete Your Return – Based on the answers you provide, you will be provided with an area to be completed. Your progress is saved when you press “Next,” so you don’t have to worry if you need to look for missing papers when you sign out. Enter your expenses – there are some strict requirements: They tax- There must be deductible business expenses. For more information on what you can and can’t claim as expenses, check out our independent guide.
• If employed people receive any work benefit during the year, such as a company car or health insurance, they must have their P60 as well as their P11D. calculation is not necessary; Fill the numbers directly from these papers.
• Submit your return to HMRC; After doing this you will receive a confirmation. Now, just make sure you pay your taxes on time — or set up a payment plan — before the January 31 deadline. If you can’t remember how much you owe, visit the website.
With the government and tax authorities keeping a close watch on tax evaders, it is in everyone’s interest to comply with taxes and file their self-employment tax returns. Contact us to learn about the many aspects of self-employment tax in the UK.