Self Assessment Tax Return – Are you ready?
by Sophie Hutchings
What is a self-assessment? Self-assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax and National Insurance Contributions. Tax is usually deducted automatically from wages and pensions. People and businesses with other income must report it in a self-assessment tax return.
Why is self-assessment important?
Self-assessment keeps you on the right side of the law. HMRC requires you to declare all your earnings, this can be anything from selling items online, to dog walking. Basically, if it’s making you money HMRC want to know about it.
What’s the deadline?
For filing online, the deadline is 31 January. We would advise getting started as early as you can, just in case you have any problems, and need to speak to an accountant (whether or not you already have one) – especially as 31 January falls on a Sunday for 2025!
If you file using a paper return, the deadline for this was 31 October, but don’t panic, if you were planning to do this, speak to us (or another accountant) and we can arrange to file this online for you.
New reporting rules for 2025, there’s only one change but you do not want to get caught off guard with this. From January 2025 online marketplaces will share sales data (dating back to January 2024) with HMRC. This new reporting requirement means that platforms like Amazon, Etsy and eBay will provide HMRC with information about sellers’ transactions to help ensure tax compliance.
This will relate to people with over 30 transactions or making sales valued at £1,700 or more in a year, although any business activity you recieve more over £1,000 from in the year needs to be declared. Effectively, the new reporting requirement for online marketplaces is a mechanic for HMRC to make sure that people declare everything they ought to.
If you are doing your own self-assessment here a few do’s and don’t to keep in mind:
Do
- Stay informed of any new reporting rules.
- Keep accurate records. By not doing so you risk making errors on your tax return. This can result in you paying more tax than you need too.
- Omit any sources of income – see new rules.
- Claim the correct allowances/reliefs.
- If you are unsure, get professional help!
Don’t
- Miss the deadline! The deadline is 31st January by missing it you risk a penalty fine of £100. A late payment over 30 days will result in an 5% increase of fine and daily penalty £10 per day for up to 90 days (max £900).
- Rush the process – errors can lead to you paying more tax than you need to, or in the worst instances, HMRC fining you.
- Don’t hesitate to seek professional advice if you are unsure how to complete your self-assessment. We are here to help and take the stress out of the process. By engaging a professional you can ensure that it is done correctly and you can focus on what you do best, run your business!
