Do you need to file a tax return online before the self-assessment deadline of 31 January? Are you scared just thinking about how to do your tax return online? Some people get ahead of the game and file their taxes on the first day of the new tax year. Not very well organised? Do not worry. Don’t worry and put things off until the last minute this time. Maybe it’s better to get them done a little faster.
We know it’s a pain, though, so we don’t blame you if you send in your tax return a little later than the early birds. It might seem hard to file it online, but if you plan ahead, it won’t be so bad. We will show you how to fill out a Self Assessment tax return online form if you need to file a tax return online. We’ll also talk about fines, due dates, and allowable costs, as well as why a lot of businesses hire accountants.
That last part is important because we’re not saying that we can give you legal or professional help. Get in touch with HMRC or a tax expert if you’re not sure. Is it simple to file taxes online? Yes, certainly, so let’s begin.
Do You Need to File a Tax Return?
Tax is usually taken out of wages and pensions instantly at the source for employees and pensioners. If a person or business makes more than a certain amount of other income that wasn’t taken out at source, they must report it on their Self-Assessment tax return.
You need to file a tax return if you made more than £1,000 as a sole business in the last tax year (6 April 2022–5 April 2023) and worked for yourself. If you were a partner in a business or a member of a limited company and their income wasn’t taxed at the source, you must also file one. If you still owe tax, you must also file one.
You may still need to send a return even if your main source of income is your pension or wages. This is because you may need to if you work in certain industries, were paid more than £100,000 through a PAYE salary plan, or have any other untaxed income, such as from:
- Renting
- Tips and commission
- Savings, investments & dividends
- Foreign income.
You can also file taxes online to get rid of some of your income tax or to show that you are self-employed so that you can get Tax-Free Childcare or maternity payments. The HMRC has this decision tree you can use if you are still not sure if you need to file a return.
Nick Levine, who used to be Head of Enterprise at the Institute of Chartered Accountants in England and Wales (ICAEW), has some more tips to share: “You have to file a return if HMRC tells you to in a letter.”
“You may still need to file a tax return even if you haven’t received such a notice if you had a new source of income or capital gains in the last tax year that you need to pay tax on. If this is the case, you should tell HMRC right away.” We’re going to learn how to file a self-assessment tax form online right away.
Tax Return Dates & Deadlines
If you are self-employed or a single trader, the last day to sign up for Self Assessment for the 2022–23 tax year is October 5, 2023. Paper tax returns must be turned in by midnight on October 31, 2023. The online due date is January 31, 2024, at midnight.
You may have to make two payments towards your current tax bill after you’ve finished your first tax return. These payments are in addition to the tax and National Insurance (NI) that is due for the previous tax year. This is called “payments on account,” and you’ll have to do it every year from now on.
There are two exceptions: either your last Self Assessment tax bill was less than £1,000 or you paid more than 80% of all the tax you owed at source the previous year. It’s important to note that underpaid PAYE tax recovered the following year also counts as being deducted at source. You have until midnight on January 31, 2019, to make the first payment on your account, and until July 31, 2019, to make the second payment.
How to Register & File a Tax Return Online
96% of tax returns for the tax year 2022–23 were made online. This is because, according to HMRC, it’s simple, safe, open 24 hours a day, and you can set up email alerts and online messages to help you keep track of your taxes.
You need to sign up for an HMRC online account if you have never done your tax return online before. After you sign up, HMRC will mail you a registration code. It may take up to 10 business days or up to 21 days if you are outside of the UK to arrive, so make sure you do this early. An ID number and a Unique Taxpayer Reference (UTR) will also be sent to you.
You will have to sign up again if you have made a return before but not last year. Before you apply for Self Assessment online, make sure you have all the information you need.
You will need your UTR, your NI number, and if you have one, an employment reference. If you’re leaving your job, you may need your P45 information, payslips, or your P2 PAYE coding notice. You may also need your P60 end-of-year certificate.
You are now ready to learn how to fill out an online tax return form. You will need to bring in your bank or building society bills. If you are self-employed, you will also need your profit and loss statement or other business records.
The first part asks for information about you. The next question asks where you got your money or gains, like from a job or being self-employed, a business or a partnership, real estate, trusts, capital gains, or money you earned while traveling abroad.
Check off any of these boxes with “Yes” to show that you did get money from any of these sources. To find out more about these sources of income, more questions will be asked.
In the third part, you are asked about your income from pensions, share earnings, interest from a bank or building society, and other sources. It’s important to include these even if you’re a sole trader and doing your own tax return. The government wants to know about all of your cash, no matter where it comes from.
After that, the form asks for more details, like money for school loans, pensions, gifts, charity work, child support, and marriage allowances. If something isn’t clear, you can get help from HMRC.
If HMRC doesn’t ask for receipts, accounts, or other paperwork to back up your Self Assessment report, don’t send them. You should still send copies and keep the originals safe.
You are in charge of the information you give, so take your time when you fill out your return. Enter the numbers carefully, and make sure you got them all right before you click “Submit.”
As long as you file your tax forms on time, you need to keep track of all the information you used to do them, like your accounts and other documents. People who run their own businesses should keep this for up to five years after the limit of January 31 each year.
If HMRC comes knocking on your door, you could be hit with a big fine for each time you don’t keep or retain enough records.
Penalties for Filing Late & Appeals
If you pay or file after the due date, you’ll generally have to pay the fine. You can, however, appeal a punishment if you have a good reason. If you file your tax return or pay your tax bill more than three months late, you will be fined £100. When you pay late, HMRC will charge you interest, so you will have to pay more.
Once the three months are up, the fines get trickier. They are based on daily penalties and what are called “tax gear penalties.” HMRC also has a tool that can estimate fines.
They might give you more time to pay or let you make payments every so often or all at once. Remember that as January 31 draws near, both the online service and tax experts get busy.
Quick Wrap-Up
You should feel a little more at ease now that you know how to fill out and send your tax return online. You can always call HMRC and ask them to make sure you have the right answer if you decide to do it yourself but are still not sure about anything.
Doing this is important because you could get fined or punished if you fill out your tax return wrong. Even though many small businesses hire a bookkeeper at some point, you might want to do your own taxes for at least the first year. You will save money and learn more about how the tax system works in the long run. Planning is important if you want to file on time. Getting ready for the Self-Assessment now will make the process less stressful.
