Among the many responsibilities of sole traders and the self-employed, one of the most important is to make sure your business is compliant with regulations and the tax regime.
Failure to comply with ‘notice-to-file’ requests for Self-Assessment can result in steep fines, and these can eventually gain interest. However, for many, this process can be overwhelming and the stakes anxiety-inducing, especially given that the HMRC helpline for Self-Assessment was closed over the summer, denying many the opportunity to get ahead of the curve before the autumn deadline.
What is Self-Assessment?
Self-Assessment is one of two main methods by which HMRC gathers tax (the other being PAYE). You must fill out a Self-Assessment form if, in the last financial year, you were self-employed (unless your earnings were less than £1k) either as a sole trader or in a partnership, or if you earned more than £100k in total.
You will also have to undertake a Self-Assessment if you have other income streams that aren’t taxed in another way, like rent from a property, tips and commission, interest from savings and investments, or money coming in from abroad. You might also have to if you received a COVID-19 grant or support payments.
This list is not exhaustive and for more information on who qualifies for Self-Assessment, you should check the HMRC website.
If you are unsure, you should engage a Stroud accountants firm such as www.randall-payne.co.uk/services/accountancy/stroud-accountants or others as soon as possible. They will be able to help you understand your obligations. Tax deadlines are incredibly busy periods for accountants, so the sooner you engage their services the better.
When is your return due in 2023/24?
If you qualify, you must register for Self-Assessment by 5th October. This is for the previous tax year ending in April of that year. If you don’t, you may be penalised. Then you have a choice. If you wish to submit on paper, you must do this by October 31st. If you wish to do it online, then you have more time. Online returns have to be submitted by 31st January.