If you are a limited company contractor, or you work under the Construction Industry Scheme, you have a legal obligation to complete a self-assessment tax return.
You can use the self-assessment tax return process to inform HMRC how much you have earned in the year and what expenses you have incurred. Our experience tells us that the majority of self-employed workers receive a tax rebate at the end of this process.
Managing your self-assessment tax return
We appreciate this can be a daunting task. Firstly, you have to understand how to go about completing the self-assessment; then you have to gather the required information to submit to HMRC. As HMRC’s guidance on Self-Assessment Tax Returns is a lengthy document, it’s little wonder that so many contractors delay addressing their tax return.
However, there is no need for your Self-Assessment Tax Return to be wrong or late when you make use of our tax returns filing service. We have a team of specialist contractor accountants who will make filing your Self-Assessment Tax Return simpler than ever. Not only will they review your tax return information to ensure it’s accurate, but they will also advise if there are ways in which you could save money. We have years of experience in Self-Assessment Tax Returns, so we know how to gather and submit the information so that you file accurate information, pay the correct amount of tax and meet the submission deadline.
We will manage the complete process on your behalf. Our service includes:
Prepare your tax return
We understand the Self-Assessment Tax Return process inside out, so can help you complete your paperwork quickly and efficiently. We will need to know about all income you receive. This will include:
- Income received from your work.
- Dividend income.
- Income from property or investments, including pensions.
- Income from benefits and Child Benefit (if relevant).
- Gifts to charity (which is eligible for tax relief).
We will also need to understand any expenses you may have incurred whilst working self-employed. This could include, but is not limited to:
- Business mileage
- Travel costs
- Work clothing/PPE
Work out what tax you have to pay
Income tax is calculated on profits, so you’ll have to pay for any earnings that exceed the personal tax allowance which is currently set at £12,500 (2019 – 2020).
Once we have the information about your income, we will be able to work out how much tax you owe. Our team will review your income and any business expenses you have incurred to make sure you do not pay more tax than you need to.
Submit your tax return
We will submit your tax return on your behalf. If you wish to submit a paper tax return (SA100), the deadline will be 31st October. If you wish to submit your tax return online, you’ll have longer – to 31st January. Please note that these deadlines are for cleared funds to have been deposited with HMRC.
You need to be aware that if you owe more than £1,000 the first time you complete a tax return, you will need to pay the equivalent amount in advance on the presumption that you’ll earn the same amount in the next tax year. There are two deadlines for these so-called ‘advance’ payments – one must be paid with your main tax return by 31st January and the other must be paid by the following 31st July.
If your earnings reduce then your advance payments will reduce accordingly.
If you miss the deadline, you will automatically receive a £100 penalty followed by a fine of £10 per additional day late, until you reach 90 days late (£900). Further penalties are applied at 6 months and 12 months.
Find out more
To find out more about our Self-Assessment Tax Return, please get in touch with our specialist contractor accountants on 01244 684700.