Selfassessment tax is any balance tax that is paid by the assesses on the assessed income after the TDS (tax deducted at source) and the advance income has been considered before the return of income is filled. This type of tax is a tax that is paid at the end of a particular financial year.
What is the self-assessment tax?
Self assessment tax is also called tax return. Self-assessment tax is the responsibility of every individual and company because they need to work out how much they should pay. It’s a form that individuals and companies should send to HMRC yearly to report how much they earned and the source through which they made the earning.
Self-assessment tax covers the tax earned in the fiscal year and this must be filled with the HMRC. For selfassessment tax, taxes are usually deducted automatically from pensions, wages, and savings. But for businesses and individuals with other sources of income, they need to report it as a tax return.
The self-assessment tax return can look very daunting if you are not prepared but if you prepare and have little or more knowledge, it looks simpler than you think. For an individual that is self-employed and is making earnings through self-employment, you are expected to enter your turnover under the business income section.
Who pays the Selfassessment tax?
This is a summation of everything that comes to you during the tax year before the deduction of expenses. But if you have more than one source of self-employed income, you need to enter the amount separately. Ensure that the job you earn more in is your main employment. Self-employed individuals can declare their expenses in two ways.
If your annual turnover is below £85000, you just need to enter your total expenses, no need to itemize them but if is above £85000, you will need to itemise them, that is entering the individual amount for the different expenses plus the total amount below or at the end.
Taxes for additional income
For individuals that have properties, a landlord, for example, you are expected to enter your income from rented properties in two different sections.
Firstly you will need to enter the total income of all your furnished holiday lettings in the United Kingdom and if you have furnished holiday letting in another country, you have to enter it in another page.
For the second section, all you need to do is to enter the total rent and the income generated from other properties. But if you make income from capital gain, the income you need to declare is called disposal proceeds. For capital gain, you need to fill different disposal proceeds for share and security, residential and non-residential properties.
When to pay for your tax return
As soon as you are done submitting your self assessment tax return, the tax amount you need to pay will be communicated to you. The tax year started on 6th April and ended on 5th April the next calendar year.
The deadline for the payment of this online self assessment tax is 31st January and payment can be done in installments although it is an advance on your next tax bill. You can choose to arrange for a budget payment plan which is an online account. With this, you can decide on how much you will be paid weekly or monthly.
Self assessment tax Return is issued to individuals by HMRC who are self-employed, generate income from land and properties, company director and those that receive other taxable income which has not been deducted.
Some accounting firms or company offers self-assessment tax returns services. This service includes:
- Calculating your liabilities
- Completing your tax returns
- File the tax returns with HMRC online
- Advise you of the amount you must pay and when to pay
Get help from the experts
For those that see tax payment as being daunting, you will need to consult the tax experts for accounting services, they will assist you on your tax returns, give you directions, and updates on how to go around it.
I hope you enjoy reading the post and find it helpful. If you want to find out more about UK Tax returns, please visit the Gov.uk site for full documentation on Self assessment tax Returns.