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Filling a Self Assessment tax return for the self employed

When you are self-employed you will pay your tax based on the income and expenses you show on your Self Assessment tax return. Here Simple Tax will give you an insight of the Self Assessment process and your legal obligations as a self-employed individual.

How to tell HMRC that you need to file a tax return:

When going self-employed it is your responsibility to notify HMRC that you have started to trade and that you need to file a tax return under Self Assessment. As the business owner you will be responsible for:

  • Keeping accounts of your business’s sales and expenses by keeping receipts
  • Paying income tax on your profits and class 2 and class 4 national insurance
  • Registering for VAT if you have incomings of £85,000 (VAT threshold)
  • You will need to register with the CIS (Construction Industry Scheme) if you’re a contractor or sub-contractor within the construction industry

You can check if you need to file a Self Assessment by visiting the Government website. If you do need to file a Self Assessment tax return then you will also need to register beforehand.

Do I need an accountant?

The simple answer to this is no, you can file a tax return yourself, however it can be helpful to work with an accountant as they will ensure that you understand the legal requirements. For example, if you don’t file your Self Assessment tax return before the deadlines you will face penalties. Understanding the legal requirements is just as important as knowing the figures that you need to include in your Self Assesment tax return.

Do I need to keep any information?

It is important that your books and records are kept safe as you should keep them for at least 5 years after the 31st January submission deadline of the relevant tax year.

Some of the following information you need to keep:

When do I need to file my returns?

If you are filing your Self Assessment tax return by the paper version you will need to file by 31st October and if you’re filing your return online you file by 31st January.

If you are filing your Self Assessment tax return for the first time you will need to notify HMRC by 5th October following the tax year you started trading.

A good way to keep on top of your Self Assessment throughout the year is to use apps such as GoSimpleTax which enables you to scan in expenses and enter data, automatically adjusting the tax owed.

More on self-assessment and small business tax.

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