AIMS Accountants for Business
AIMS Accountants for Business
Every year, most taxpayers in the UK have their taxes done by their employers, but if you are self-employed, you are likely to have to submit a self-assessment tax return. But who else needs to submit one?
A self-employed ‘sole trader’ must submit a self-assessment if earnings are above £1,000, before any tax reliefs, or they are a partner in a business partnership. You also need to submit a tax return if you claim income tax-reliefs, or to prove you are self-employed to claim tax-free childcare or maternity allowance.
There is also a group of employed workers who must submit a tax return and where just paying tax through PAYE is not enough. This is generally when people who are employed receive some extra income, such as from property rentals, having investment income, receiving foreign income, doing casual freelance earnings or other untaxed income. Often high earners over £100,000 on PAYE need to file a tax return as they are likely to be in a more complex financial position and it can affect your tax-free Personal Allowance, losing £1 of your tax-free Personal Allowance for every £2 of income over £100,000.
The most important thing to do if you think you might need to complete a self-assessment is find out sooner rather than later. You don’t want to be in a position where you are rushing at the last minute and if you do think you want or need help to complete it its harder to find someone great the closer you leave it to the end of January deadline for submission.
So, now you know you need to do a self-assessment, but how can you do the preparation faster and more efficiently? If you are submitting your tax return yourself, or preparing paperwork to send to your accountants, the below ideas might help speed up the process.
The next self-assessment tax return is for dates between 6 April 2020 to 5 April 2021, and tax must be paid before 31 January 2022. Last year, there were 700,000 taxpayers racing to hit the deadline because they left it to the last day and 26,500 people submitting in it in the last hour of the last day. Although many people leave it to the last minute, there is a growing trend of filing early. The number of customers choosing to file on the first day of the new tax year has almost tripled from almost 23,000 in 2017 to nearly 64,000 in 2021. There are fines for submitting late, even by a day, or by submitting incorrect information.
Remember – Submitting your tax return late will mean you get fined, even a day late means a penalty of £100. If you are late by up to three months means £10 extra for each day late and capped in 90 days, late by up to six months means an extra £300 or 5% of the total tax due (whichever is the highest) or late by up to twelve months meaning an extra £300 of 5% of the total tax due (whichever is the highest).
Don’t be one of the “I had a curse put on me” or “I couldn’t type, because my boiler broke, and it was too cold” people!
Henry Ejdelbaum, MD, comments “Our advice is always to get organised and submit as early as you can. We are happy to help you with that if you need it, but either way just don’t leave it to the last minute. If you are not sure if you must submit, get in touch with your local accountant to provide further guidance. “
ENDS
Johan Da Silva
AIMS Accountants for Business
020 7616 6634
Notes to editors:
About AIMS Accountants for Business
Established in 1992 to provide SMEs a fixed fee service, free of any obligations, through franchised accountancy practices. For nearly 30 years our success has been driven by our singular client focus, our proven management systems and the ongoing support and training provided to all AIMS franchisees.
By doing more than just crunching numbers, by providing business advice and creating a solid relationship with our clients, we provide the services that has seen us become the only nationwide network of qualified accountants in the UK.