If you're struggling to complete your online self-assessment tax return, services such as VouchedFor* can help you find vetted accountants to assist you. Just click on the 'advice type' and select 'Accountant'.
In this article, we explain who needs to complete a self-assessment tax return, tips for those who are submitting their first self-assessment tax return and finally what to do if you are struggling to afford your tax bill.
7 tips to help file your self-assessment tax return on time
We've provided 7 tips below that can help you with completing your self-assessment tax return. We've included tips on paying your tax as well as your options if you can't pay on time.
1) Do you need to submit a self-assessment tax return for 2023/24?
It is first worth considering whether you need to submit a self-assessment tax return.
Most British taxpayers pay tax automatically via their employer through a system known as Pay As You Earn (PAYE). However, people who pay tax in this way may still need to complete a self-assessment tax return, especially if they have earned additional untaxed income, perhaps via a second job, property rental or through savings and investments.
You may need to submit a self-assessment tax return for 2023/24 if:
- You were self-employed during the tax year 2023/24 and earned more than £1,000
- You have earned an income from renting out a property or received other untaxed income in the tax year 2023/24 (including tips/commission etc)
- You have earned income in excess of £7,500 from renting out a room in your own home in the tax year 2023/24
- You have earned income from savings, investments and/or dividends in the tax year 2023/24
- You have earned overseas income or lived abroad while receiving a UK income in the tax year 2023/24
- You were a partner in a business partnership in the tax year 2023/24
- You wish to claim income tax reliefs, e.g. on money paid into a personal pension, charitable donations etc
- You were employed in the tax year 2023/24, but used your own money to travel and pay for other job expenses
- You were employed in the tax year 2023/24 and claimed expenses in excess of £2,500
- You earned more than £50,000 in the tax year 2023/24 (£60,000 from 2024/2025) and either you or your partner claimed child benefit
- Your adjusted net income in the tax year 2023/24 was above £150,000
You can also check if you need to send a tax return by using the free online tool on the gov.uk website.
2) Allow enough time to gather together everything you need to file your self-assessment tax return
Firstly, if you've never filed a self-assessment tax return before, then you will need to register for self-assessment, a process that will take at least 10 days and relies on documents being sent to you in the mail. You'll first need to create a Government Gateway ID by supplying your name, email address and a secure password.
You shouldn't underestimate how long it takes to complete a self-assessment tax return online. While the process has become more streamlined in recent years, you still need to ensure you have all of your documents to hand and can access all of the information you need in order to accurately complete your tax return.
When it is time to file your self-assessment tax return, ensure you have your Unique Taxpayer Reference (UTR) to hand and make sure you can easily access bank statements, invoices and receipts. Also, think about whether you'll need access to old payslips or P60s and how and where you can source that information. Planning all of this ahead of time can make the filing process quicker and easier.
Online accounting software can help simplify and speed up online self-assessment and many offer a range of tools to help every type of business. Check out our article 'What is the best business accounting software in the UK'. Alternatively, consider whether you would be better off paying for a professional accountant to complete your online self-assessment on your behalf. Bear in mind, however, that you are paying for their experience and expertise and so you will still be required to carry out a lot of the administration yourself, including the registration process as well as providing all of the supporting documents. Services such as VouchedFor* can help you find a vetted accountant that is best for your business and budget.
Finally, check out HMRC's free smartphone app, which allows you to complete a number of simple functions directly from the app itself, including:
- Making a Self Assessment payment
- Reporting tax credits changes (and completing renewals)
- Accessing your 'Help to Save' account
- Accessing a tax calculator that can work out take-home pay after Income Tax and National Insurance deductions
- Tracking forms and letters you have sent to HMRC
- Ability to claim a tax refund if you have paid too much tax
- Ability to update your postal address
3) Make sure you use up all of your allowable expenses
There are a number of allowable expenses that may not be immediately obvious and so it is worth taking the time to ensure you are claiming for all of the legitimate expenses that can help to reduce your tax bill. We've provided an example of just some of the lesser-known business expenses that you may be entitled to claim.
- Bank charges
- Business mileage (You can claim 45p for every business mile travelled up to 10,000 miles, then 25p per mile for anything over 10,000 miles)
- Bad debt (This is revenue you are not planning to receive, such as long-standing unpaid invoices etc)
- Charity donations
- Insurance premiums (professional indemnity insurance etc)
- Clothes (If your business requires you to wear a uniform)
- Laundry (Business uniform, sheets/towels in the hospitality industry etc)
- Marketing costs (Sponsorship, advertising, free samples etc)
- Capital gains (No need to pay tax unless profits exceed the 2023/24 tax-free allowance of £6,000 and remember that losses from the same or previous tax years can also be used to lower your tax bill. For 2024/2025, the capital gains tax allowance is £3,000.)
4) Use up any unused allowances from previous tax years
Check to see if you have any unused allowances from previous tax years as you may be entitled to a rebate. The deadline for submitting your 2023/24 tax return is 31st of January 2025 and this is also the deadline for making amendments to your 2022/23 self-assessment, assuming you did one the previous year.
Allowances may include things like the Work from Home allowance, where you can claim for the increased costs of things like electricity and gas while working from home.
Additionally, you can make amendments to legitimate charitable donations or you could make extra pension contributions and carry forward some of your pension allowance from previous tax years.
Good to know: Once submitted, you can amend your self-assessment tax return up until 31st of January 2026 (Amendments available 72 hours after submission)
5) Things to remember if your earnings have increased
It is handy to keep in mind how and when you may be required to complete a self-assessment tax return because an increase in your salary or earnings is likely to trigger this requirement. Below, we summarise the key personal allowances that you should keep in mind.
- Savings and investments - There is a personal savings allowance of up to £1,000 for basic rate taxpayers, meaning any earnings from savings and investments (not including ISAs) over and above this must be declared via a self-assessment tax return. The personal savings allowance is reduced to £500 for higher-rate taxpayers and £0 for additional-rate taxpayers.
- Property rental income - There is a property allowance of up to £1,000 a year for individuals who receive an income from land or property. If your property income is between £1,000 and £2,500 then you will need to notify HMRC and if it is in excess of £2,500 then you will need to complete a self-assessment tax return. If you own a property jointly with others, each person is eligible for the £1,000 allowance against their share of the gross rental income.
- Other income - There is a trading allowance of £1,000 where individuals can earn up to £1,000 gross per year without paying additional tax. This is sufficient for most people as it would likely cover income earned through buying and selling online, hobbies etc. If your income exceeds £1,000 gross then you would need to submit a self-assessment tax return to declare your earnings.
- Child Benefit - If you or your partner earn an annual salary in excess of £50,000 (£60,000 from 2024/2025) and either of you claim child benefit then you would need to submit a self-assessment tax return as you may be required to pay a 'High Income Child Benefit Charge'.
- Salary - If your adjusted net income is over £150,000 per year then you will be required to complete a self-assessment tax return. If you make over £100,000, your personal allowance will be reduced by £1 for every £2 that your adjusted net income is above £100,000. This ultimately means that those earning over £125,140 will not be entitled to a personal allowance.
6) Understand how and when to pay your tax bill
The 31st of January 2025 is the deadline for submitting your 2023/24 self-assessment online. It is also the deadline for payment and late payment is likely to incur a penalty. Be warned that submitting your self-assessment tax return online doesn't automatically trigger a payment and so you will need to log in to a separate section of the HMRC website to pay your self-assessment tax bill. You can opt to pay by direct debit, but be aware that the process will take around 5 working days to set up and complete.
If your tax bill is more than £1,000 then you will be required to set up payments on account. Each payment is half your previous year’s tax bill and they are payable twice a year, by midnight on 31st of January and midnight on 31st of July.
Good to know: If you know your earnings or tax bill are going to be lower than last year, you can ask HMRC to reduce your payments on account. This can be requested either online or by post.
7) Fines, interest charges and what to do if you can't pay on time
If you think you may struggle to pay your tax bill in full you should consider HMRC's 'budget payment plan'. The plan works like a savings account, allowing you to make regular weekly or monthly payments towards your next tax bill. If the total amount in your budget payment plan is unable to cover your next tax bill in full, you'll just need to make a payment to clear the balance. It is a useful plan for businesses that prefer to spread the tax payments throughout the year and payments can be paused for up to 6 months if necessary.
Fines for late self-assessment submission
If you are worried about the late submission of your self-assessment tax return or are unable to pay your tax bill on time then you can estimate your penalty and interest using HMRC's calculator. Below we summarise the fines for filing your self-assessment tax return after the 31st of January 2025 as well as the penalties for not paying your tax on time.
- Immediate - £100 fine for late submission, even if there is no tax to pay
- After 3 months - If you fail to file your return for a further 3 months, you will be charged daily penalties of £10 (up to a maximum of £900)
- After 6 months - If you still haven't filed your return after 6 months, you'll be required to pay an additional penalty of 5% of the tax due (or £300, whichever is greater)
- After 12 months - If you still haven't filed your return after 12 months, an additional penalty of 5% of the tax due will be applied (or £300, whichever is greater)
Penalties for unpaid tax
If you missed the payment deadline for your tax then you will be charged interest from the day that it was due. The rate for late payments is set at the Bank of England base rate plus 2.5%. The bank of England base rate in September 2024 is 5%. You can read more about the latest late payment interest charges on the HMRC website.
In addition, HMRC will apply penalties:
- After 30 days - a penalty of 5% of the tax due
- After 6 months - an additional penalty of 5% of the tax due
- After 12 months - an additional penalty of 5% of the tax due
What to do if you can't afford your tax bill
If you are within 60 days of the payment deadline, then contact HMRC as soon as possible, as you are likely to be eligible for its 'Time to pay' arrangement. To be eligible, you must owe less than £30,000 in tax, be willing to complete the repayments within 12 months and have no other debts or payment plans with HMRC. Be mindful that HMRC will ask about your existing savings and assets and expect you to make reasonable efforts to clear the debt via those means first. You'll need to share your earnings, your outgoings and how much you are willing to repay each month.
If you cannot pay your tax bill then you should contact HMRC as soon as possible. Failure to get in contact with HMRC and/or failure to agree an instalment plan could lead to debt recovery, court action and even bankruptcy.
For further help with debt, check out our article 'Where to get free debt advice'
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