What Is Self Assessment in the UK And How To Complete It
June 23, 2021 (Investorideas.com Newswire) Taxation is a complicated subject. Despite the UK's efforts to make paying taxes as uncomplicated and effortless as possible, settling your dues can still be a hassle. Luckily for most people, they usually don't have to bother with paying income taxes personally.
For the most part, taxes get deducted automatically from wages, pensions, and savings. However, if you have any other types of income you must report it in a tax return.
There are various forms you need to fill, and while it isn't exactly rocket science, it can get tedious and confusing. The process starts with a Self Assessment and just goes on to more challenging and demanding tasks from there.
The silver lining is that you don't have to do it alone. You can always count on expert East London Accountants for help with filing crucial tax documents. Doing so will allow you to get it over and done with in no time.
The first step toward setting things straight with the taxman is to file for Self Assessment. Here's what you need to know about it to get started.
What is Self Assessment?
Self Assessment is a document you need to file if you have received specific types of income for the first time. If all your income comes from wages, pensions, and savings, you need not concern yourself with filing for Self Assessment. However, if you have any other type of income, you should look into it as soon as possible.
Filing for Self Assessment is a one-off registration process. You normally need to do it only once - from that point onwards, you will be in HMRC's system and you will receive prompts to file tax returns regularly. Note that if for some reason you skip filing a tax return for a year or more, you will need to file for Self Assessment again to get back in the system.
Who Needs to File for Self Assessment?
The comprehensive list of people who need to file for Self Assessment is quite long and can be a bit confusing. Although it's a good idea to be familiar with it, you don't need to remember it verbatim. The main thing to take away from it is that if you receive any sort of income other than wages, pensions, and savings, you should file for Self Assessment.
Sole traders, business partners, and company directors are legally obliged to file a return. So are people who fall under the category of Lloyd's underwriter, examiner, or share fisherman. People who have received income from selling property should also file for Self Assessment.
Note that there are some very specific details to look out for before filing for Self Assessment. For instance, there are three different types of registration to choose from. The first type is a self-employed or a sole trader. The second type is categorized as not self-employed. The final type is a partner or partnership. Pick the one that applies to you when filing for Self Assessment.
What are the Deadlines For Filing Self Assessment?
The deadlines for filing Self Assessment and paying your income tax vary depending on how you're filing and whether or not you've filed before.
If you have never submitted a tax return before and you're filing papers, you need to file your Self Assessment by 5 October 2021. Paper tax returns need to be submitted by midnight 31 October 2021.
If you're using the online filing system, you can submit your return by midnight 31 January 2022 if filing online. That is also the final date by which you should pay any tax owed for fiscal 2021.
Note that filing tax returns is mandatory, regardless of whether you received a prompt from the UK government to do so. Failure to do so may result in a penalty.
How do you File for Self Assessment?
The UK government has a functional system that allows you to file your Self Assessment online. Under the circumstances, it is advisable that you use it to file your Self Assessment via the Internet. Registering and filling out all the necessary information can be very tedious and time-consuming. Still, doing it online is preferable for both the person filing and the state.
There is also the option of filing for Self Assessment manually, by filling out the proper paper forms and submitting them. Note that there are some specific instances where this is the only option available to people who need to file a Self Assessment.
If you're filing for income that came from a partnership, a trust, or estate you will not be able to do so online. The same is true if you lived abroad as a non-resident, need to report many “chargeable gains”, or have received money as a religious minister.
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