Does the thought of filing your Self Assessment make you nervous? Fear not! We have some top tips on how to complete your tax return online form, ahead of the 31 January deadline.
It can be a daunting process, but good preparation can take the pain out of the task. We’ll also share details about dates, penalties, and allowable expenses, and look at why many businesses use an accountant.
Note: we’re not claiming to offer legal or professional advice. If you’re in any doubt, contact HMRC or a tax professional. Use can use the Sage Accountant and Bookkeeper directory to find an expert suited to your location and needs.
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Do you need to file a tax return?
If you were self-employed as a sole trader in the last tax year (6 April 2022 to 5 April 2023) and earned more than £1,000, you need to file a tax return. You must also file one if you were a partner in a business partnership or director of a limited company whose income was not taxed at source and/or have further tax to pay.
Even if your primary income is from your wages or pension, you may still need to send a return if you work in specific sectors, were paid more than £100,000 via a PAYE salary scheme, or have any other untaxed income, such as from:
- Renting
- Tips and commission
- Savings, investments and dividends
- Foreign income.
You can also file a tax return online to claim some income tax relief or prove you are self-employed, for example, to claim Tax-Free Childcare or maternity allowance.
Tax return dates and deadlines
For the 2022/23 tax year, the deadline for registering for Self Assessment if you’re self-employed or a sole trader is 5 October 2023. The deadline for filing paper tax returns is midnight on 31 October 2023. The online deadline is midnight on 31 January 2024.
Once you’ve completed your first tax return, in addition to whatever tax and National Insurance (NI) is due for the previous tax year, you may also have to make two payments towards your upcoming tax bill for the current tax year we’re in right now. This is known as payments on account, and you’ll have to do it every year moving forward.
The exception is if your last Self Assessment tax bill was less than £1,000, or you’ve already paid more than 80% of all the tax you owe at source in the previous year (note that underpaid tax collected via PAYE in the following year also counts as being deducted at source).
The first deadline for paying the tax you owe on account is also midnight on 31 January for the first payment on account and 31 July for the second.
How to register and file a tax return online
If you’ve not completed a tax return online before, you must register for an HMRC online account. When you’ve signed up, HMRC will post you an activation code, which can take 10 working days to arrive—or up to 21 days if you are abroad—so do this well in advance. You’ll also receive a user ID and Unique Taxpayer Reference (UTR). If you’ve filed a return before, but not last year, you will need to register again.
Before applying online for Self Assessment, gather all the information you need in advance. You’ll need your UTR, National Insurance number and employer reference if you have one. You may need your P60 end of year certificate, P11D expenses or benefits, P45 details of leaving work, payslips and or your P2 PAYE coding notice.
Now you’re ready to tackle how to fill in a tax return online form itself. You’ll need your bank or building society statements at hand, and if you work for yourself, you will need your profit or loss account or other business records too.
The first section asks for personal details, followed by income and gains (i.e. from bank interest, dividends, pensions, benefits etc.), and any other financial information (i.e. student loans, pension contributions, charitable donations etc.). Take your time completing the information, enter figures carefully, and double-check everything – you’re responsible for the information provided.
Don’t send any receipts, accounts or other paperwork to HMRC supporting your Self Assessment return unless HMRC asks explicitly for them. Even then, you should only send copies and keep the originals safe.
Assuming you file on time, you must keep records of all information used to complete your Self Assessment tax returns—which is to say, your accounts and other information. Self-employed businesses should keep this for up to five years after the 31 January deadline each year. A significant penalty can apply for each failure to keep or preserve adequate records should HMRC come knocking at your door.
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Allowable expenses
If you are self-employed, your business will have various running costs. You can deduct some of these costs to work out your taxable profit providing they are allowable expenses.
These can include:
- Costs of running an office, for example, stationery or phone bills.
- Uniforms or protective clothing – although you generally can’t claim for clothing such as business attire or shoes.
- Staff costs, for example, salaries or subcontractor costs.
- Financial costs, for example, insurance or bank charges.
- Some or all of the fees paid to professionals, such as accountants or lawyers.
- Costs of your business premises, for example, heating, lighting, and business rates.
- Advertising or marketing, for example, website costs (but not entertaining costs, such as buying a client lunch!).
As an alternative to claiming individual expenses, you may be able to claim simplified expenses, which are flat rates that you can use to calculate tax relief on vehicles, working from home and living on your business premises.
This saves time but may mean you don’t claim for all you might be able to.
Another option is to use the trading allowance instead of expenses to reduce your tax bill. The government allows sole traders to claim up to £1,000 as a tax-free trading allowance, but if you use it, then you’re not allowed to claim expenses or capital allowances.
Penalties for filing late and appeals
You’ll usually have to pay a penalty if you file after the deadline or pay late. However, you can appeal against a penalty if you have a reasonable excuse.
Expect a fine of £100 if your tax return is up to three months late or if you pay your tax bill late. You will have to pay more if it is later, and HMRC will charge interest on late payments.
Beyond three months, there is a more complex system of fines based on daily penalties and so-called tax gear penalties. HMRC also provides a penalty estimation tool.
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How to pay your tax
When filing online, once you have completed your Self Assessment return, HMRC will tell you how much tax you owe. Each of the two payments on account is half your previous year’s tax bill. If you still owe tax after making your payments on account, you must make a balancing payment by midnight on 31 January the following year.
If you’re paying your tax bill by debit card, allow two working days for the transaction to clear.
If you prefer to pay more regularly throughout the year—such as weekly or monthly—you can use HMRC’s budget payment plan, but only if your previous payments are up to date and if you are paying in advance.
The ways to pay your tax are via online or telephone banking (faster payments), CHAPS, debit, or corporate credit card online, your bank or building society, BACS, direct debit (if you have set one up with HMRC before), or by cheque through the post.
Final thoughts
By now, you should be feeling a little more confident when it comes to filling in and sending your tax return online. If you decide to do it yourself but are still not sure of anything, you can always contact HMRC and ask them to ensure that you have the correct answer.
The key to filing on time is planning. Squeezing in some Self Assessment preparation now will lead to a less stressful experience.
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