Key Points of Filing Self Assessment Tax Return for Self Employed


December 23, 2021

Filing a self-assessment tax return is a daunting task, especially when left for the last minute. True tax planning and saving need time and preparation - and preparation here implies preparation in advance.

The basis for proper tax return filing is an organised approach where you need to understand the process and what is required. If either of the below points holds for you, you will need to file your tax return: 

  • Your self-employment related income was above £1,000 before claiming any tax reliefs
  • If you have rented out the property, the income of the same amounted to more than £2,500. If the amount was between £1,000 but less than £2,500 then you still would have to contact the HMRC
  • If the tips or commission that you have earned are above £2,500 and are part of your untaxed income
  • If the income you have from your savings and investments is more than £10,000
  • If Capital Gains Tax needs to be paid post the selling of a second home or shares based on the profits earned on the same
  • If you are a company director (unless you run a charity or a similar non-profit organisation)
  • If your income or that of your partner was above £50,000 and Child Benefit is being claimed as well
  • If there is income you have received from abroad that is taxable or vice-versa if you are living there and receiving income from the UK
  • If your total taxable income is over £100,000
  • If you have earned over £50,000 in 2020-21 and also made pension contributions then for the extra tax relief owed a self-assessment would have to be filed in which case a tax accountant could assist you
  • If you are a trustee of a registered pension scheme or a trust
  • If your State Pension amount was higher than your Allowance but that was your sole source of income
  • If the HMRC has sent a P800 indicating that tax was underpaid in the previous tax year

Having an accounting firm looking after your tax return can prove beneficial as you can get more things done than merely submitting a tax return. For instance, if you want to qualify later for the State Pension and similar benefits then voluntary Class 2 National Insurance contributions will need to have been made. 

For employees, things are different as if tax has already been paid through the PAYE system, then additional things like self-assessment need not be worried about unless earnings were above £100,000. But for self-employed individuals, if any of the above points hold true it might be a good idea to have an accountant go over the finer details with you. 

After all, simply paying tax is not enough, you need to pay the right amount of the same, and it need not always be more.