For Individuals

How do I register with HMRC for Self Assessment?

According to HMRC, you should register for Self Assessment within three months of the need arising, ie from the date your circumstances required you to file a Tax Return. This could be the date you started to receive rental income, or became a director in receipt of remuneration, or had any other income or capital gains subject to Self Assessment.  You should use a different form to register for self-employment and National Insurance contributions (NIC) and this is called the CWF1 form shown on our Self-Employed FAQ page. This can be done very simply using the online SA form.  You can use the link below.

https://www.tax.service.gov.uk/shortforms/form/SA1 

Once you are registered you should then receive notification by post from HMRC of your UTR number, which is your 10 digit Unique Taxpayers Reference number..

Am I paying National Insurance?

Being registered for Self Assessment to do Tax Returns does not mean you are registered for NIC purposes and you will only pay Class 2 NIC if you are self-employed earning are above the Small Profits Threshold. Rental profits, pension income and other general investment income types are not subject to NIC as these are not deemed as earnings, but instead unearned income.

If you are employed, you will pay Class 1 NIC on your salary when your income is above the Primary Threshold.  However, if your salary is lower and below the Primary Threshold, yet above the Lower Earnings Limit, you will still get the benefits of paying. Although you will include your salary on your Tax Return, you will not include any Class 1 NIC paid.

You can register to voluntarily make Class 3 NI contributions.

The NI rates are shown in more detail within this HMRC page, link here;

 https://www.gov.uk/rates-and-ni-contributions 

What should I include on my Tax Return?

Your Tax Return must include all your sources of income received in that tax year, including any income already taxed at source. This is because your income is added together to work out your effective income tax rate for each type of income. There may be times when you have not paid enough tax at source, which could be through a PAYE adjustment or a PAYE code amendment. If you are unsure of whether your PAYE code being used is correct, you should get this checked (your employer will not have a breakdown of your PAYE code and will not be able to advise). If you receive benefits in kind, it is likely that they are not fully included in your PAYE code and you will receive an annual P11D form showing the value of your taxable benefits in kind to be included on your Tax Return any you may therefore end up paying more income tax thereon. You should also include all your investment income on your Tax Return, including small amounts of bank interest (if over £1 together). Bank interest is no longer taxed at source and although you may be entitled to a tax-free allowance, it will still need to be included in your Tax Return. If you receive rental income, this must also be included, except in very certain situations, ie you only receive rent from a room in your house which is less than the Rent-a-Room relief allowance or your property income is under the £1,000 allowance. If your are a higher rate taxpayer, you can include relief for charitable donations made under Gift Aid and personal pension contributions. This list is not exhaustive and you should seek advice if you are not sure.

When do I have to file my personal Tax Return?

The tax year ends on the 5th April and the filing deadline of the Income Tax Return for that year will be 31 January after the year-end for paper tax returns.  If you are filing a paper tax return this must be filed by 31 October after the year-end unless you have a reasonable excuse for not being able to file this online.  

How do you calculate my tax?

We use a software that mirrors the HMRC tax calculations.  The tax rates and calculation methods are standard and not an individual process categorised by us.  Our tax team are appropriately trained and qualified and receive regular professional updates to keep them on top of the constantly changing tax legislation. 

Do I have to make payments on account?

If your income tax liability is in excess of £1,000, you will usually automatically be due to make payments on account in advance of the following tax year, unless you have sufficient income already taxed at source, such as PAYE income, that is proportionately higher.  Payments on account may well be due if your main income is from rental property for example. Payments on account are based on 50% of the liability due and are payable on 31 January following the year-end and then the following 31 July.  If you believe your income for the next year will be much less, you can make an election to reduce your payments on account but if they are reduced incorrectly or too much, interest will become due, and possibly penalties if there is intent to reduce the payments incorrectly. You will not pay payments on account on capital gains tax.