Self-assessment Archives | Page 2 of 9

Do I Need to Register for Self-Assessment?

April 5, 2024/in Accountancy, Directors, HMRC, Self-assessment, Self-employed, Tax returns/by Taxfile

by Mohamed at Taxfile.

In today’s guide, we look at the rules around whether or not you need to register for Self-Assessment and submit a tax return to HMRC each year. Let’s take a look.

Reasons to Register for Self-Assessment

You generally need to register for a Self-Assessment tax return if your income isn’t taxed at the source, meaning the tax isn’t automatically deducted from your wages/salary. Here are some common scenarios where you would need to register for self-assessment:

You are self-employed — sole traders, freelancers, and consultants typically fall under this category.
You receive rental income — if you earn income from renting out a property, you need to register.
You have a high income — employees earning over £100,000 per year need to register as their tax calculations may become more complex. (From 2023-24 you are only required to register if your income is above £150,000).
You have other income sources — this includes income from abroad, dividends, and partnership profits.

If you are still unsure about registration, please contact HMRC or call Taxfile on 0208 761 8000.

Registering for UK Taxes is Important

Registering for UK taxes is important for a few reasons, as we’ll explain below.

Firstly, it helps you avoid penalties. If you don’t register for Self-Assessment when required, you could face penalties from HMRC. These can be significant, especially if you’ve been earning income for a while without registering.

Secondly, it helps to ensure accurate tax payments. By registering and filing a Self-Assessment tax return, you ensure you’re paying the correct amount of tax. Without it, you might underpay and owe interest, or overpay and have to wait for a refund.

Thirdly, it helps you stay legally compliant. In severe cases, failing to register and pay your taxes can lead to legal action, including prosecution.

Registering also helps you maintain good standing with the Government. Being registered with HMRC shows you’re taking your tax obligations seriously. This can also be important if you’re applying for credit, a mortgage, or a visa.

Do Directors Need to Do a Self-Assessment?

Not all directors need to do a Self-Assessment tax return, but some do. Here’s a breakdown:

Directors with only PAYE income

If your only income from the company is through PAYE (Pay as You Earn), where tax is deducted at source, you generally don’t need to do a Self-Assessment.

Directors with additional income

If you have any other taxable income besides your salary, like dividends, company benefits, or income from another job, you likely do need to do a Self-Assessment tax return in order to report it.

However, even if you aren’t required to register, HMRC might still ask you to file a Self-Assessment return.

Learn more about director self-assessment here.

Why is Payroll Important for a Director?

Payroll ensures compliance with tax regulations. Directors are considered employees for tax purposes, and PAYE is the system used to collect Income Tax and National Insurance Contributions (NICs) from their salary. Running payroll ensures these deductions are made and reported correctly to HMRC.

Payroll creates a clear and accurate record of your director’s salary payments. This is important for tax purposes, but also for things like calculating benefits and pension contributions that might be tied to salary.

Being on payroll allows directors to qualify for certain benefits they wouldn’t get if paid through dividends alone. These can include enrolling in a company pension scheme and accruing National Insurance credits that contribute to your state pension.

Payroll ensures transparency by helping to maintain a clear separation between personal finances and the company’s finances. This is important for legal and accounting reasons.

While there might be tax advantages to structuring some of your director’s income as dividends, payroll remains a vital part of ensuring you’re following regulations and have a clear record of your director’s overall compensation.

Learn more about how to pay yourself as a director here.

Contact Taxfile – Accountants & Tax Advisors

Tax and accountancy help for South Londoners

If you need any accountancy help for your limited company or small business, Taxfile is here to help:

020 8761 8000 Book Appointment Contact Us

Are you in the South East or London? Taxfile has offices in Tulse Hill, and Dulwich, in South London.

Taxfile is Open on Sunday Mornings in January — Perfect for 2022-23 Tax Returns

We’re Open on Sunday Mornings in January — Perfect for 2022-23 Tax Returns

January 18, 2024/in Accountancy, Accountants, Self-assessment, South London, Tax advisors, Tax returns, Taxfile, Tulse Hill/by Mark

With the self-assessment tax return deadline almost upon us, we are opening our Tulse Hill office* on Sunday mornings, 9 am to 1 pm, for the remainder of January. That’s as well as the previously announced Saturday morning opening during the same hours. It’s the perfect opportunity to discuss your tax return with us or bring in figures and records without having to disturb your working week. Weekend time slots are limited, though, so please book a free 20-minute appointment as soon as possible if you’d like to visit.

020 8761 8000 Book Appointment Tax Return Help

Basis Reform and Spreading

January 2, 2024/in Basis Period, Self-assessment, Spreading Tax, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisors, Tax calculation, Tax liability, Tax planning, Tax returns, Taxation, Taxfile, Transitional Profits, Tulse Hill/by Taxfile

As of April 6, 2023, the Self-Assessment (SA) for income tax has undergone a significant transformation, known as Basis Period Reform. This change aims to align the taxation of business profits with the standard April-April tax year, rather than any other accounting periods that may have been required by the taxpayer.

While the transition to the new basis period has introduced certain complexities, it also presents opportunities for businesses to manage their tax liabilities more effectively. One such opportunity lies in the spreading of tax arising from transitional profits.

Transitional profits refer to the profits that arise from the transition between the old and new basis periods. These profits can be spread over Read more

Understanding Basis Period Reform for Self-Assessment Tax in the UK

December 21, 2023/in 2023, 2023-24, 2024, Accountancy, Accountants, Basis Period, Bookkeeping, Making Tax Digital, MTD, Partnership, Self-assessment, Self-employed, Sole traders, Tax, Tax accountants, Tax calculation/by Taxfile

Are you a sole trader or in a partnership?

Do you have different accounting dates from the standard 6th of April to the 5th of Apri?

If you answered YES to both questions, some IMPORTANT changes will apply for the tax year 2023-24.

The concept of the basis period determines the time frame used to calculate taxable profits or losses for self-employed individuals, partnerships, and some trusts. It marks a departure from the traditional “current year” basis, where business profits were taxed based on the accounting period ending within the tax year. Instead, it introduces a “tax year” basis, aligning taxable profits with the UK’s standard tax year, running from 6 April to 5 April. Read more

Tax Return Accountants

December 6, 2023/in Accountancy, Accountants, Dulwich, London, Self-assessment, Self-employed, South London, Tax, Tax advisors, Tax returns, Tulse Hill/by Guy Bridger

HMRC issues tax returns each year to those who meet the criteria; you may be self-employed or a higher earner from employment income. The tax return software available online will calculate your tax liability if you fancy giving it a try yourself. However, most people use accountants and tax advisors who might, in their wisdom, be able to save you money and in some circumstances give you guidance and good advice. Indeed, Taxfile can help in all these areas and we explore this in today’s article. Read more

TODAY is the deadline for submission of your tax return. Contact Taxfile for help filing & avoid a minimum £100 fine!

31st January was the Self Assessment Tax Return Deadline!

January 29, 2023/in 2021, 2022, Accountancy, Accountants, Deadline, HMRC, Self-assessment, South London, Tax accountants, Tax advice, Tax advisers, Tax returns, Taxfile, Tulse Hill/by Mark

[As at 1 February 2023]: The 31st January was the Self Assessment tax return and tax payment deadline. Miss the deadline and you’ll be in for a £100 HMRC fine right away. Interest will also be charged from 1 February, as usual, if tax is not paid by midnight on 31 January (rules apply). Time is short, so contact Taxfile for help with your tax return as soon as possible please. Book an appointment* with one of our helpful tax advisors and accountancy experts TODAY — we’ll make it easy!

020 8761 8000 Book Appointment Get Started Here

A Personal Message from Guy Bridger at Taxfile

January 29, 2022/in 2020, 2021, 2022, Accountancy, Accountants, Advice, Deadline, Dulwich, Filing deadlines, Guy Bridger, HMRC, Income tax, Late return, London, Online returns, payment plans, payments on account, penalties, Self-assessment, Self-employed, Sole traders, South London, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax agents, Tax calculation, Tax returns, Taxfile, Tulse Hill/by Taxfile

Dear Taxfile Client,

We’re aware that many people are struggling right now. So, I wanted to personally touch base with you to confirm that, although the official deadline for submission of 2020/21 self-assessment tax returns and tax payments is Monday (31 January), there is now some extra time this year. This is great news for you if you are concerned about missing the deadlines or having to pay an HMRC penalty for being late. It should really take the pressure off for those who are struggling or worried.

For self-assessment tax returns, you now have until midnight on 28 February to submit. HMRC will only charge you a late filing fee if you file later than this.
For self-assessment tax payments, you now have until 1 April to make your payment (or arrange an HMRC payment plan) before incurring an HMRC late tax payment surcharge. While you will still incur interest for late tax payments from 1 February, HMRC’s interest rate is only 2.75% per annum, so even a month’s interest is unlikely to equate to much for most people.
For tax payments on account (payment in advance for the next tax year), there is no HMRC surcharge/penalty if you’re late but it does attract interest. However, again, that’s only at HMRC’s low rate, so is unlikely to amount to much for most.

We are here to help you, so don’t worry if you owe tax or are running late on your tax return. The Taxfile team can help you sort things out, particularly as we have a little longer than usual. We can work something out during February if you are worried about HMRC surcharges, interest and deadlines. Please get in touch if so.

020 8761 8000 Book Appointment Get Started Here

Lastly, don’t forget that we are open on Saturdays during January and February (by appointment) and open later (until 6pm) on Mondays and Tuesdays. Read more

HMRC Waives Late Filing & Payment Penalty for 31st January Deadline

January 10, 2022/in 2020, 2021, 2022, Accountants, Coronavirus, COVID-19, Pandemic, Self-assessment, Self-employed, Sole traders, Tax, Tax accountant, Tax accountants, Tax advice, Tax advisers, Tax affairs, Tax agents, Tax bill, Tax calculation, Tax return, Tax returns, Taxes, Taxfile/by Taxfile

HMRC has taken the decision to not issue a late filing penalty for anyone who does not submit their self-assessment tax return before midnight on 31st January 2022. It is important to point out that the deadline for filing your 2020-21 tax return remains 31/01/22 but the waiving of the penalty allows anyone who is unable to file their self-assessment tax return by the 31/01/22 deadline avoid a £100 late filing penalty as long as they submit their tax return sometime before midnight 28th February 2022.

Furthermore, anyone that is unable to pay their self-assessment tax liability before 31st January 2022 will not receive a late payment penalty if they pay their tax in full, or call HMRC to arrange a payment plan before 1st April 2022. It is important to note that interest will be added on taxes owed from 1st February 2022.

For a second year in a row, due to COVID, an extra Read more

Christmas & New Year Opening Times at Taxfile

December 22, 2021/in 2021, 2022, Accountancy, Accountants, Accounts, Annual Return, Christmas, Limited companies, London, Opening Times, Self-assessment, Self-employed, Tax, Tax accountants, tax rebates, Tax refunds, Tax returns, Taxfile, Tulse Hill/by Mark

Season’s greetings to all our clients and readers and sincere thanks to all of you who have kept us busy with work during 2021 — we really appreciate it.

Here’s a quick reminder of our opening times during the Christmas period and into the New Year. This is for our Tulse Hill office (Thurlow Park Road) and our Dulwich office (Turney Road) except where otherwise indicated.

Friday 24 December 2021 (Christmas Eve): we’re open from 9am until 3pm (Tulse Hill office only).
Saturday 25 December 2021 (Christmas Day): closed.
Sunday 26 December 2021 (Boxing Day): closed.
Monday 27 December 2021 (a public holiday): closed.
Tuesday 28 December 2021 (a public holiday): closed.
Wednesday 29 December 2021: open 9am until 5pm.
Thursday 30 December 2021: open 9am until 5pm.
Friday 31 December 2021: open 9am until 3pm (Tulse Hill office only).
Saturday 1 January 2022 (New Year’s Day): closed.
Sunday 2 January 2022: closed.
Monday 3 January 2022 (a public holiday): closed.
Tuesday 4 January 2022: we re-open from 9am until 6pm.
Wednesday 5 January 2022: open as usual, 9am until 5pm.
Thursday 6 January 2022: open as usual, 9am until 5pm.
Friday 7 January 2022: open as usual, 9am until 3pm (Tulse Hill office only).
Saturday 8 January 2022: open 9am until 1pm by appointment (Tulse Hill office only).
Sunday 9 January 2022: closed.
From week commencing Monday 10 January: open as usual (see footer).

Have You Contacted Taxfile About Your Tax Return Yet?

If you need a self-assessment tax return or any other kind of return and haven’t yet arranged it with us, please arrange an appointment urgently. January becomes frantically busy in the accounting world, so please make the most of the remaining December appointments while they’re still available — thank you. Appointments are by telephone, Zoom, Microsoft Teams, in person (under safety protocols) … Read more

Taxfile Covers Clients for HMRC Enquiries

December 1, 2021/in Accountancy, Accountants, Corporation tax, Fee protection cover, HMRC, HMRC enquiry, HMRC investigation, Payroll, Self-assessment, Tax returns, VAT, VAT returns/by Mark

Did you know that Taxfile’s clients are protected from HMRC enquiries, for example for tax returns and similar submissions we make to HMRC? Through a simple, low-cost fee, Taxfile promises to liaise with HMRC on clients’ behalves should HMRC ever want further clarification of figures submitted. This includes HMRC queries following a tax return, VAT return, corporation tax return or payroll submission made by us. Usually, protecting clients from this type of HMRC investigation could mount up in terms of cost, as it can sometimes take hours to deal with, even for tax experts like us. However, with Taxfile’s low cost cover, it’s all covered automatically (within reason, of course*).

The enquiry cover costs only …

£5 for a self assessment income tax return;
£10 for a VAT return;
£25 for a corporation tax return;
£4 for a payroll submission.

(VAT extra). Most accountants would charge you a considerable sum for this level of protection against HMRC enquiries. However, at Taxfile, we spread the cost through the whole business and, as a result, the cost to clients is a fraction of what it could otherwise be. We hope you agree that it’s a very small price to pay for such peace of mind, should the worst happen.

Tax Advisers & Accountants in Tulse Hill & Dulwich, South London

Do ask a staff member if you would like more information or, indeed, if you would like any tax or accountancy help. Telephone 020 8761 8000 or contact us here. We are Read more