Happy New Year!
2022 may have just started, but in financial terms, we’re almost at the end of the year. Whether
you’re a sole trader or a partnership/ limited company, fully hands-on or happy to pass everything
over to your accountant to deal with, it’s important to know the key deadlines you need to meet
throughout the year: whether or not you’re handling the details at a granular level, in the eyes of
HMRC the buck stops with you.
With that in mind, over the course of the year we’ll be posting regular updates in the blog with the
key dates you can’t afford to miss, what actions you may need to take, and why they’re so
important.
The big deadline you need to be aware of this month (if you’re self-employed) is 31 st January. This is
when your self-assessment tax return is due.
If you’re employed by a company, you most likely pay tax on a PAYE (Pay as you Earn) basis: tax is
deducted from your monthly salary at source – it’s all taken care of for you by your employer, and
this blog probably won’t be of much interest to you! However, if you’re newly self-employed and
have never had to complete one of these before – it can be massively intimidating.
The most important thing to remember is that your Self Assessment form isn’t as daunting as it
looks, especially if you’re well-organised and understand what information you need to supply.
The information you’ll need to file your return is –
- your ten-digit Unique Taxpayer Reference (UTR). In order to submit a Self-Assessment
- tax return for the 2020/21, you will need to have registered for Self Assessment by the 5th October 2021 to receive your UTR – you can’t submit a return without it
- your National Insurance number
- details of your untaxed income from the tax year: this includes income from self-employment, dividends and interest on shares
- records of any expenses relating to self-employment
- any contributions to charity or pensions that might be eligible for tax relief
- P60 or other records showing how much income you received that you’ve already paid tax on
HMRC have produced a number of help sheets for completing your tax return – it’s definitely worth
taking the time to read through them carefully.
Once you’ve completed the necessary forms, you’ll need to submit it to HMRC and pay your tax bill.
The deadline for this is midnight on 31 st January – we don’t recommend you leave it to the last
minute though!
There are a number of ways you can pay your bill –
- online or telephone banking
- Clearing House Automated Payment System (CHAPS)
- debit or corporate credit card
- in person at your bank or building society.
You can also pay by cheque, but it you’re paying close to the deadline, then you’re better off using
once of the above options, as these are faster and reduce the risk of you being penalised for a late
payment.
If you do miss the deadline, you’ll be penalised – it’s currently £100 if you’re up to 3 months late
filing or paying your tax, and if it’s later than this the penalty will be higher. You can correct any
errors until the filing deadline on the following year – so if you made a mistake on last years return
you have until 31 st January this year to amend it.
Our advice, if you’re completing your own return, would be to start early and take your time – that
way you’re far less likely to make mistakes.
If you’re in a position to do so, you can make the process far less stressful by hiring a professional.
We understand all the ins and outs of filing tax returns and seek to make it as painless an experience
as possible! Get in touch today to see how we can help you.
Keep an eye on our posts for other relevant dates throughout the year!