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How to Register for Self-Assessment Tax Returns in the UK: A Step-by-Step Guide
Jan 16, 2024
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If you receive income outside of PAYE employment in the UK, you may be required to file self-assessment tax returns. Whether you’re self-employed, a freelancer, an investor, or receive money from dividends, you have to document your earnings and pay any taxes owed using HMRC’s self-assessment system. However, how can you register for self-assessment tax returns? The procedure may appear difficult, especially if you are doing it for the first time without any professional help.
Read our blog below for extensive knowledge regarding the registration process, explanation for key deadlines, and essential tips to help you stay compliant with regards to self-assessment tax returns.
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What is a Self-Assessment Tax Return?
A self-assessment tax return is a system used by HMRC to collect tax from individuals and businesses who earn income that isn’t taxed at source. You may need to file a self-assessment tax return if you are self-employed and earn over £1,000 annually. It is also applicable if you work as a sole trader or freelancer or even earn rental income as a landlord. Additionally, if you receive dividends from investments or have foreign income that is taxable in the U.S., you need to register for self-assessment tax returns. Furthermore, earning over £100,000 from employment or other sources also makes you eligible for self assessment tax returns.
Who Needs to Register for Self-Assessment?
If you are a resident of the UK then you should know that not everyone in the UK needs to file self-assessment tax returns. However, if you are a self employed individual or sole trader, landlord, company director, investor or someone who earns foreign income then you must register for self-assessment tax returns and file them annually with HMRC.
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When to Register for Self-Assessment?
To avoid penalties, you must register with HMRC by 5th October following the end of the tax year in which you earned untaxed income. The deadline for filing your self-assessment tax returns online is 31st January of the following year. The three key deadlines that should be taken into consideration are 5th October for registering with HMRC, 31st October for paper tax return and 31st January for online tax return and payment.
How to Register for Self-Assessment Tax Returns?
Following a step by step guide that breaks the process of registering for self assessment tax returns makes it easier to understand and follow in case of no professional help.
Step 1: Check If You Need to Register
The first step if you are wondering how to register for a self assessment tax return is to check if you meet the aforementioned criteria. You can also do so by visiting the HMRC’s online tool to get rid of any confusion.
Step 2: Gather Necessary Information.
To register you would need a few details, which include your National Insurance (NI) number, your Unique Taxpayer Reference (UTR) number if you have previously registered, accurate details of your income sources and business details in case you are self-employed.
Step 3: Register with HMRC
Registration is quite easy and can be done online through the HMRC website. Self-employed individuals can use the self-assessment registration for self-employed service from the website. However, for other individuals registration can be done through the HMRC self-assessment portal. Once registered, you’ll receive your Unique Taxpayer Reference (UTR) via post within 10 working days.
Step 4: Set Up a Government Gateway Account
After receiving your UTR, create an account on the HMRC Government Gateway. This allows you to file your tax return online.
Step 5: File Your Tax Return by the Deadline
Once registered, complete and submit your self-assessment tax returns by 31st January each year to stay compliant and avoid penalties.
How to File Self-Assessment Tax Return?
To file your self-assessment tax return, you must first log into your Government Gateway account. Then, complete the tax return form by providing details about your income, expenses, and any tax reliefs. Next, calculate your tax bill through HMRC’s automatic calculation. Lastly, pay any tax due by the 31st January. If you struggle with tax calculations and are worried about any errors or missed deadlines, are overwhelmed, consider hiring an accountant or using an accounting software.
Common Mistakes to Avoid
When registering and filing self-assessment tax returns, people often make the mistake of missing the registration deadline and late registration can result in penalties. Providing incorrect information is also the cause of penalties, so ensure your details are accurate. Furthermore, failing to report all income may lead HMRC to investigate underreported earnings. Additionally, forgetting to claim expenses is also a common mistake, or if you are self-employed, claim allowable expenses to reduce tax liability.
Reach Out to Us!
Still stressed about registering and filing for self-assessment tax returns? Avoid costly mistakes and ensure compliance with our expert tax guidance here at Octa Accountants. Get in touch with our tax professional today and make your tax filing stress-free to remain compliant.
Final Thoughts!
Registering for self-assessment tax returns in the UK may appear complicated, but following this step-by-step guidance will ensure a seamless process. Whether you’re self-employed, a property owner, or generating supplementary finances, early registration and precise filing are critical for avoiding fines and being compliant. Understanding your obligations, planning ahead of time, and meeting deadlines can help you navigate the self-assessment system with ease.
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