Self assessment tax return

Self Assessment Tax Return

Self-Assessment is the process by which individuals, businesses, or corporations completes a tax return to tell the Inland Revenue department of their income and capital gains (profit made by selling assets), or to request a discount on their tax bills. The amount of income and gains that you have declared will be used to calculate your tax bill, and you can do the calculation yourself as well. Tax returns can be filled online or on paper and can be of different types with separate supplementary pages depending upon your situation. Penalties and late fees may be levied in cases of late submission of the return.

For some people, who have relatively straightforward means of income, filing a tax return is not always mandatory. Especially, if they have only one income source and use PAYE or Pay As You Earn to pay their taxes regularly. For others, who are high-rate taxpayers, a company director, or otherwise have complicated tax affairs with multiple sources of income, filing a tax return becomes a must. All UK taxpayers must maintain documentation of the tax they pay, their income, and their expenditure for the benefit of the Revenue Department.

The tax year runs from the 6th of April each year to the 5th of April in the succeeding year. There are important dates in the tax year relating to the filing of tax returns and making tax payment. It is important for you to be aware of these dates, so that you do not miss the deadline and end up paying late fees.

Filing your tax return online using the HM Revenue and Customs (HMRC) secure service has its benefits. It offers you automatic calculation tools, processes your forms faster, and very importantly allows you later deadlines. After you submit the tax return the Revenue Department sends you a ‘tax calculation’ brief. It is extremely important to go through it carefully, because, the figures that are indicated in it are used to calculate your tax bill. If you think your tax calculation is wrong, you should immediately inform the Tax Office.

After the tax calculation HM Revenue and Customs sends you a ‘Self Assessment Statement,’ which tells you the amount of your tax bill and advises you about the mode of payment. For people, who have already paid more than they are required, are intimated through this statement about how much they will be repaid. If you have filed your return online, you can view your statement online and you will also receive a copy in your mail.

The HM Revenue and Customs recommends the filing of Self Assessment Payments electronically, like through direct debit, internet or telephone banking, debit or credit cards over the internet, because electronic payments are safe, secure, and far more convenient. You can of course make your payments through post if you so wish. If at times you are unable to make a tax payment though, you shouldn’t keep silent. The best way to go about it is to contact HM Revenue and Customs; it is possible that you will reach an arrangement.