How to do a self-assessment tax return

One of the most important obligations you have when working for yourself is to keep on top of your tax affairs. A big part is knowing how to do a self-employed tax return.

Filing the self-assessment tax return (also called the personal tax return) is essential, and you must get it right; otherwise, you might pay too much or too little tax.

However, it can be a complex process, and many people struggle with it the first time around – some know very little about it altogether.

So, in this article, we explain what self-assessment is and how to do a tax return as a self-employed worker.

What is self-assessment?

In short, the self-assessment is how HMRC recovers taxes from the self-employed and others who earn money not taxed under Pay As You Earn (PAYE).

Contractors working through limited companies, for example, fall into this bracket. As do sole traders or a partner in a business – both parties must complete a self-assessment tax return.

You might also need to complete one if you’re claiming Income Tax relief and some other benefits. Anyone earning over £100,000 via PAYE must also complete a self-assessment tax return.

Why do I need to do a self-assessment?

Completing a self-assessment tax return is how you report to HMRC what you’ve earned and how much you owe for the previous tax year.

You must complete the self-assessment and pay the taxes you owe by the deadline, otherwise, HMRC will likely issue a penalty.

Now you know why you need to complete a tax return, we’ll explain how to do one.

What is the deadline for a tax return?

First – for those yet to complete a tax return – you need to register for self-assessment if you haven’t already. It can take up to three weeks, so get this done well ahead of the 5th October deadline.

If your tax return is a paper submission, HMRC must receive it by the 31st October. If you decide to complete an online submission, you have until 31st January.

Once you’ve filed your return, you’ll be told how much tax you owe – you’ll need to pay your tax bill by midnight on the 31st January, too.

You may have to make one payment or two depending on how much tax you owe.

If you owe less than £1000, you must pay whatever you owe by midnight on 31st January.

You'll pay in two instalments if you owe more than £1000. The deadline for the first instalment is 31st January, and the second payment is due on 31st July. This is known as making a payment on account, which is effectively an advancement payment on your next self-assessment tax bill.

Step-by-step guide

Register for self-assessment – if you need to. You’ll be given a Unique Tax Reference (UTR) which you can use to log in and keep track of your tax return.
Fill in your tax return – you can get help with this from an accountant.
Submit your tax return by the deadline – 31st October for paper submissions, 31st January for online submissions.
Pay your tax bill – no later than the deadline: midnight on 31st January.

How can Caroola help?

With an idea of how to do a tax return, you may feel confident enough to tackle the self-assessment yourself. But if you’d rather have trusted support, we’re here to help.

With complete service accountancy packages starting from just £40 per month, our experts can take care of the entire process, helping to ensure your compliance.

To learn more about our sole trader accountancy packages, please request a callback, and we’ll be in touch.