Self-Assessment Tax

Key Self-Assessment Deadlines

Meeting deadlines is non-negotiable. Missing them means fines and interest charges.

• 5 October: Register for self-assessment if you’ve started earning untaxed income.

• 31 October: Deadline for paper returns.

• 31 January: Deadline for online returns and tax payments.

• 31 July: Second payment on account deadline (if applicable).

Plan early. Mark your calendar and set reminders.

Organise Your Records First

Strong financial records are your foundation. They reduce errors and help you claim the right expenses.

Gather:

• Invoices and receipts.

• Bank statements.

• Expense records.

• Details of any pensions, donations, or tax reliefs.

Consider using accounting software or spreadsheets to keep everything neat. Organised records save hours when filing.

Calculating Your Tax Liability

Here’s how to work out what you owe:

1. Add Up All Income: Include self-employment earnings, rental income, dividends, and any other sources.

2. Deduct Allowable Expenses: Claim business costs, such as:

   • Office supplies

   • Internet and phone

   • Travel for work

   • Part of your home bills (if working from home)

3. Apply Tax Bands: For 2024/25 (England):

   • 20% on income up to £50,270

   • 40% on income between £50,271 and £125,140

   • 45% over £125,140

Use HMRC’s tax calculator if unsure. Accuracy is key.

Filing Your Tax Return: A Simple Process

Follow these steps for a hassle-free experience:

1. Register with HMRC by 5 October. You’ll receive your Unique Taxpayer Reference (UTR).

2. Log in to HMRC Online Services and access the self-assessment section.

3. Enter Your Income & Expenses: Double-check figures before submission.

4. Submit Before Deadline: Avoid the £100 late filing penalty.

Keep a copy of your return and payment confirmation for your recor

Payment Options: Choose What Works Best

HMRC offers several ways to pay:

• Online: Use debit/credit card or bank transfer.

• Direct Debit: Set this up through your online HMRC account.

• By Post: Send a cheque with your UTR on the back. Avoid delays by posting early.

If you’re struggling to pay in full, contact HMRC early to arrange a payment plan.

Common Deductions and Allowable Expenses

Maximising deductions reduces your tax bill. Common claims include:

• Business Costs: Software, marketing, subscriptions.

• Home Office: A percentage of rent, energy bills, and internet.

• Travel: Mileage, public transport for work purposes.

• Professional Fees: Accountant or tax adviser costs.

Always keep receipts and log your expenses consistently.

Avoiding Common Mistakes

Many taxpayers fall into traps that cost money and time. Here’s what to watch for:

• Missed Deadlines: Set digital alerts weeks in advance.

• Incorrect Figures: Cross-check income totals and expenses.

• Forgetting to Register: Failing to register means you can’t file—and you’ll get fined.

• No Record-Keeping: Keep everything for at least 5 years after the 31 January deadline.

If unsure, speak to a tax professional before submitting.

Example: Freelancer Tax Return Journey

Meet Sarah, a freelance graphic designer earning £35,000 a year. She also rents out a flat earning £7,000 annually. Sarah:

• Registers with HMRC by 5 October.

• Logs £42,000 total income.

• Deducts £6,000 in allowable business and property expenses.

• Files online by 31 January.

• Pays her tax bill through online banking.

She keeps all records, files on time, and avoids any fines—stress-free.

Final Thoughts: Own Your Tax Responsibilities

Filing self-assessment tax doesn’t have to be daunting. With the right prep, clear records, and awareness of key dates, you’ll avoid penalties and stay in control.

By learning the system and following a structured approach, you can:

• Minimise tax liability.

• Prevent filing mistakes.

• Improve your overall financial health.

Don’t let tax season surprise you. Take action early and confidently.