Tax returns and Self Assessment

If you are registered as Self Employed once a year you will need to fill in a tax return – or Self Assessment form, in the HMRC jargon – to let HMRC know how much you have earned, how much your deductions are and what profit you have made. From this, they will calculate how much tax you owe and send you a demand for payment.

If you fill in your tax return online, the amount of tax you owe will be calculated immediately and you can pay it online; similarly, if you have overpaid income tax, you can arrange for this to be paid back as well.

Submitting your Self Assessment online tends to be simpler, as it will only present the boxes you need to fill in depending on your answers to previous questions.  More information on online Self Assessment can be found on the HMRC website.

You will need to fill in a tax return no matter how much you earn – even if you did not earn any money from self-employment, you still need to fill this in and return to HMRC for their records.

Self Assessment is too complex to go into in much detail here, and the specifics can change each year – instead, take a look at the HMRC Self Assessment pages for more information. There are also many webinars available for free on the HMRC website.

It is possible to have a full- or part-time job and also to work self-employed as well, as long as you declare all your earnings and tax paid in the Self Assessment form.

Every taxpayer in the country is allowed to earn a small amount of money each year and pay no tax on it – your personal tax allowance; if your profits are less than this (that is, your earnings minus your deductions for business-related spending) you will pay no tax.  You will pay a staged amount of tax if you earn over this amount.

A good overview of the income tax process is at the Citizen’s Advice Bureau website, and on the Gov.uk site.

If you need further help, as well as contacting an accountant, you might find useful tax advice from the following organisations.

All of their websites are free to access and some provide useful services and helplines to specific eligible groups.

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