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Being ‘not self-employed’ means your total income includes untaxed sources that cannot be collected using your PAYE tax code. As a result, you must register for self-assessment using form SA1.
Examples of such individuals include those who receive —
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High-earning taxpayers with an income of up to £150,000, taxed under PAYE, are not automatically required to file a Self-Assessment tax return for the year 2023/24 if they meet the following conditions:
Additionally, starting from 2024/25, HMRC has removed the £150,000 threshold that required high earners to submit self-assessment tax returns.
Understanding your Self Assessment obligations as a company owner or director is crucial. Here is a clear breakdown of when registration is necessary —
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Uncertain? HMRC's online Self Assessment tool can help determine if you need to send a tax return. Feel free to use this resource if you have doubts about your employment status.
If you are a company director or shareholder who receives additional untaxed income, you will file self assessment tax returns because of the following —
See also: What Is a Limited Company?
A Sole trader or a partner in a limited liability partnership (llp) is considered self-employed for tax purposes and is, therefore, required to file tax returns to avoid fines and penalties. This ensures that all income, benefits, and expenses are accurately reported and taxed.
Partner tax obligations and benefits that must be managed through self-assessment include —
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The nominated partner is responsible for registering the partnership for self assessment and ensuring the entity and its partners comply with all legal and tax obligations.
A solo trader’s tax obligations that must be managed through self-assessment include —
Ensure you accurately report your earnings to meet your tax obligations.
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Starting April 6, 2024, Class 2 National Insurance Contributions (NICs) will no longer be mandatory for self-employed individuals. Still, the option to pay will remain for those who wish to qualify for state pension benefits. However, in most cases, your NIC will be treated as having been paid to maintain your National Insurance (NI) record.
Below is a detailed overview of the changes to NIC payment requirements —
Profits above £6,725: Class 2 contributions are treated as having been paid to protect your NI record.
Profits Above £12,570: You must pay Class 4 contributions. For 2024/25, you’ll pay 6% on profits between £12,570 and £50,270 and 2% on earnings over £50,270.
Profits Below £6,725: You do not have to pay anything, but you can choose to make voluntary Class 2 contributions, which is £3.45 a week for the tax year 2024 to 2025.
Overseas Workers and Other Groups: Certain groups, such as overseas workers, may also voluntarily pay Class 2 NICs to maintain their NI record and contribution years.
GOV.UK resources for more information -
To register online for self assessment if you’re not self-employed, follow the steps below.
If you already have a business tax account with HMRC sign in and add Self Assessment to your list of services. You’ll need a Government Gateway user ID and password.
If you are not self-employed, use the registration form SA1 to enrol for self-assessment. You may not receive an email confirmation after completing and successfully submitting the form. However, there's no cause for concern if you've followed all the necessary steps and filed correctly.
HMRC may take up to 3 weeks to contact you with your taxpayer number, and this duration may extend during busy periods. You can use this tool to check when you can expect a reply.
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Regarding tax matters, it's crucial to act promptly once you've determined that you need to submit a payment or register for a tax-related service. The sooner you start the registration process, the more time you'll have to address any issues and avoid the stress of approaching deadlines.
After obtaining your UTR number from HMRC, use the SA100 tax return form to send your tax return. You can either complete and send the form online or mail a physical copy to
Whether you file online or by paper, the information you fill out remains the same. However, if you opt for online submission, you will get 3 extra months before the deadline. The deadline for submitting your tax return by post is October 31st, following the end of the tax year, while the deadline for online submissions is January 31st.
Yes, you do. A UTR number is a 10-digit unique identifier issued by HMRC to companies and individuals for tax purposes. If you don't already have a taxpayer reference, one will be issued when you register for self-assessment. You can find a lost UTR number in any correspondence from HMRC.
Please note that if you’re waiting for a unique taxpayer reference from HMRC to activate your online account and file your tax return, it may take up to 10 working days to receive it or up to 21 days if you are abroad.
Knowing when and how to settle your Self-assessment tax bill is crucial. Here is a breakdown of key tax return dates.
You have three main options for settling your tax bill —
Remember, late payments incur penalties. Opting for a Budget Payment Plan can help you avoid significant penalties by ensuring timely payments, even if you cannot pay the entire amount upfront.
If your income is over £1,000 and less than 80% of it is taxed at the source, HMRC may require you to pay payments on account, a payment made towards your next year's self-assessment tax bill.
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For example, let's say your first self-assessment was for 2022/23, and you filed your return by 31 January 2024. HMRC determined that you owed £8,000 in tax and charged you an additional £4,000 as a payment on account for the upcoming 2023/2024 financial year, with the second instalment due by 31 July 2024 to cover the balance.
Here is a breakdown of how the payment on account works:
First Self-Assessment Return: By 31 January 2024, send a self assessment tax return using form SA100 for the 2022/23 taxation year.
Tax Bill and Payment on Account: HMRC determines that you owe £8,000 in tax for the 2022/23 fiscal year. Consequently, they charge an additional £4,000 as a payment on account for the upcoming 2023/2024 tax assessment year.
Payments on account are due twice a year, on January 31st and July 31st, and are calculated as half of the previous year's tax bill. In our example above, the first instalment of £4,000 is due by 31st January 2024, while the second instalment of £4,000 is due by 31 July 2024.
This example illustrates how payments on account work in the UK:
Please note that the payment on account covers the projected tax owed for the upcoming financial year. Therefore, if your tax bill for the upcoming year is higher than the payment on account, you must make a balancing payment by 31 January of the following year. However, if your tax bill is expected to be lower for the upcoming year compared to the previous year, you can apply to HMRC to reduce your payments on account.
The HMRC app offers a convenient way to access information about your taxes, NI status, tax credits, and benefits.
With the app, you can check your:
Yes, you can use commercial software to send your returns online. Commercial software providers offer services for submitting tax returns and additional pages to HMRC. HMRC acknowledges and accepts returns filed using these software products.
Here is a breakdown of the various HMRC support resources available to help you —
You should consider appointing a qualified accountant or tax agent for professional guidance. They can help you structure your income for optimal tax efficiency and benefit from claiming all the reliefs and allowances you are entitled to. They can also ensure accurate and timely filing of your tax return.
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