Self-assessment tax returns and other key financial dates

Business | 01/05/2021

Self-assessment tax returns and other key financial dates

What is a self-assessment tax return?

When you’re employed by somebody else, tax is usually deducted automatically from your wages through Pay As You Earn (PAYE).

However, if you have an additional form of income or you work for yourself, you are responsible for submitting your own tax return and will need to complete a self-assessment. This is the system Her Majesty’s Revenue and Customs (HMRC) uses to collect income tax.

You will be required to complete a self-assessment if you are:

  • Self-employed as a sole trader and have earned more than £1,000 in the tax year (6 April to 5 April)
  • A partner in a business partnership

You may also need to complete a tax return if you have other untaxed income such as:

  • Rental property income
  • Tips and commission
  • Income from savings, investments and/or dividends
  • Foreign income

If you’re unsure whether you need to complete a self-assessment, there’s a helpful tool on the website which will guide you through the process.

You can also choose to fill in a tax return if you need to:

  • Claim income tax reliefs
  • Prove you’re self-employed for you to be able to claim tax-free childcare or maternity allowance for example
  • Pay the high income child benefit charge

HMRC sets out when your self-assessment must be completed by and when payment should be received. Failure to submit within the given timeframes can lead to hefty penalties.

It’s a good idea to mark these dates in your diary, with regular reminders in the run-up to each deadline, so that you don’t forget.

Key financial dates for self-employed workers

31 January 2021 – all online self-assessment tax returns must be submitted to HMRC and paid in full by midnight. This will be your first payment on account.

You will receive a penalty of £100 if your tax return is up to three months late and you will continue to incur penalties until payment is made.

If you previously deferred your second payment on account for the 2019/20 tax year due to coronavirus, this payment is also due on 31 January 2021.

5 April 2021 – end of the tax year. Please note that if you stopped trading during the tax year, you will still need to complete a return for your last year in business. If you fail to do so, you may be hit with a fine even without any tax owed.

31 July 2021 – second payment on account is due.

5 October 2021 – if you have income that has not been taxed before you received it or you have capital gains in excess of £12,300, you must notify HMRC of this by 5 October.

31 October 2021 – all paper tax returns should be submitted to HMRC by midnight.

30 December 2021 – if you have employment or pension income and want HMRC to collect your tax through your PAYE code, you must submit your tax return online by 30 December.

Self-assessment tax returns can often be incredibly complicated and so it’s always a good idea to seek professional help from a qualified financial adviser. Reach out to our of our advisers for assistance today.

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