Self-Assessment Tax Return: Who Needs to File One?

Mess People working as independent contractors or those earning additional income streams must file a self assessment tax return in order to pay income tax. We explain what self-assessment is, who it applies to and how this should be completed.

Self-Assessment: What You Should Know

With another self assessment tax returns deadline behind us for , many have come to terms with being caught late again next time around. Be proactive now by marking 31 January 2024 in your calendar as that date represents when online filing and payment must occur by midnight; any delays could incur penalties of €50+/-.

Read on for general details regarding self-assessment – whether filing tax returns is mandatory and how you can file one online – as well as general details regarding self-assessment in general.

What Is Self-Assessment?

Self-employed and those with multiple streams of income must file a self-assessment tax return in order to pay their income tax due to self-assessment tax returns.

Employed by a business, tax is automatically withheld from your wages; but if you earn money elsewhere (such as renting out property) then self-assessment tax payments must be made via this system.

Once your self-assessment tax return has been filed, any outstanding taxes should be submitted directly to HM Revenue and Customs (HMRC) rather than being automatically withheld through Pay As You Earn (PAYE), where taxes may be deducted by employers before payment arrives in your paycheck.

In this article, we explain what self-assessment is, who it applies to,

How it should be paid.

When self-employed, payments will typically arrive throughout the year without deduction of tax and National Insurance contributions being automatically taken off as planned – therefore self-assessment becomes necessary in such cases.

Therefore, you are required to submit a tax return containing details of everything you earned during the previous tax year, expenses you can claim back, taxes due and National Insurance payments due. Payment should then be made either online, at your bank branch, through direct debit payment plan, cheque payment or bank transfer prior to HMRC’s end-of-tax-year deadline.

Even if you aren’t self-employed, in certain instances it may still be necessary for you to submit a self-assessment return if your money comes through other streams.

Who Must File a Return (SACR)

  • For the tax year ending 5 April 2023 (ie between 6 April 2022 to 5 April 2023) you are subject to filing this return:
  • Self-employed as a sole trader who earned over €1,000.
  • Partners in a business partnership
  • Gaining income by renting out property.
  • Gaining savings, investments or dividend income
  • Gaining foreign income defusing more than €100,000.
  • Filing returns may also be required if you qualify for tax relief on
  • charity donations
  • pension contributions.
  • maintenance payments

Additionally, if you claim Child Benefit and earn more than €50, 000 annually, then an income tax return and payment of the “High Income Child Benefit Charge” might be mandatory.

If you believe you may fall under any of these categories but are uncertain whether to, it would be advisable to investigate further as failing to pay tax could incur penalties and interest charges on funds earned this way.

How to Register For Self-Assessment.

Registering for self-assessment can be done either online on the government website, or filling in and mailing HMRC a CWF1 form. Your mode of registering depends upon:

  • Whether or not you’re self-employed.
  • These forms provide more details
  • Whether registering as partners/partnership.

To file online, log on or create your business tax account. If this is your first year filing online but submitting previously using paper returns only (not self-assessment returns), form CWF1 must also be filed online to reregister with HMRC as it was used previously for self-assessment tax returns submitted offline.

Once registered for self-assessment, newcomers to self-assessment should receive their Unique Taxpayer Reference (UTR), which will enable them to file their return with HMRC within 10 days. They may find their UTR sooner in their personal tax account or via the HMRC app

How to file self-assessment returns.

If filing your tax return yourself is too daunting of an endeavor for you or time prohibits it, hiring an accountant to file it on your behalf can help make life simpler. They will calculate and file all relevant returns; their fees could even count as allowable business expenses on your tax return! Click here for information regarding paying self-assessment bills

Self-assessment deadlines occur every year on October 5 (deadline for registration of self-assessment), October 31st for filing paper tax returns for previous tax year (and February 28th if filing online returns and paying any debt owed from previous year), and January 28th as deadline for online returns as well as payments owed (for previous year).

This deadline applies to tax returns filed for the previous tax year (6 April 2022 – 5 April 2023) from 6 April 2022 through 5 April 2033. Additionally, any amount you owe must also be settled on or before 31 January 2024.

Often if filing by the due date has been missed, an automatic €100 fine applies – though you may be eligible to contest this in certain instances through reasonable excuses listed on HMRC website.

How Can I Withdraw from Self Assessment?

If your employment ceases or business partnerships dissolve or you wish to stop contributing for other valid reasons, notify HMRC before the due date for self assessment returns is reached and file your final tax return before its deadline.

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