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Self Assessment: A guide for small businesses on filing tax returns

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Got a Self Assessment tax return to file but not sure how to go about it? Whether it’s the first time you’re doing it or if you’ve completed one before, there are still things you need to be aware of.

From dealing with allowable expenses – basically understanding what you can and can’t claim back – to being clear on deadlines and penalties, having clarity of the Self Assessment process and doing the right things can really help your business.

The small business guide to Self Assessment will provide you with the information you require to successfully complete and file your tax return.

It covers the importance of keeping good records, which will make things much easier for you when the time comes to file your tax return.

There are details on registering for Self Assessment (if it’s your first time dealing with it) and completing your tax return.

And it also features advice from certified accountant Paul Donno, who is also the director of 1 Accounts Online. He shares a story of how his practice helped a client save several thousand pounds on their tax return.

The small business guide to Self Assessment covers the following topics:

  • What is Self Assessment?
  • How to keep good accounts
  • Deadlines and penalties
  • How to register for Self Assessment
  • What you can and can’t claim for
  • How to complete your tax return
  • Getting support with Self Assessment

An excerpt from The small business guide to Self Assessment

Self Assessment is how you should declare income you’ve received to the government if you’re a sole trader or a partner in a partnership businesses.

It’s how you declare income from the work you do. For people in full-time employment receiving payslips or people who receive a pension, Self Assessment can be used to declare money they receive outside of their employment or pension.

It can also be used by anybody to declare taxable income from things such as savings, tips, commission, rental income, and so on.

Does Self Assessment apply to me?

If any of the following applies to you then you will need to register for Self Assessment, and should do so as soon as possible to avoid potential penalties:

  • You’re a self-employed sole trader earning more than £1,000 per year.
  • You’re a partner in a business partnership, regardless of whether or not you’re the nominated partner.
  • You’re the director of a limited company whose income is not taxed at source and/or you have further tax to pay.

Additionally, if any of the following apply to you regardless of your employment status then you will have to register for Self Assessment:

  • Your total income (minus tax relief) is more than £100,000.
  • You have to pay High Income Child Benefit Charge because your income was more than £50,000 and you or your partner claimed Child Benefit. (In this case, your partner can complete a Self Assessment tax return instead of you.)
  • You earned £2,500 or more from property or land in the UK (or £10,000 or more before expenses).
  • You got more than £10,000 from savings interest, money from bare trusts, interest in possession trusts, or share dividends.
  • You received a payment or charge on a private pension, including money in pension pots, above the annual or lifetime allowance, or unauthorised payments from a pension scheme, or overseas payment charges.

You may need to register for Self Assessment regardless of your employment status if you need to pay Capital Gains Tax. Additionally, Self Assessment is required if:

  • You pay tax on income from a trust.
  • You receive taxable foreign income of £300 or more (typically foreign dividends).
  • You received £2,500 or more in interest, tips, commission or cash-in-hand payments.

Editor’s note: This article was first published in January 2019 and has been updated for relevance.

Taking care of tax if you’re self-employed

Getting your taxes right is vital. Read this guide for support with Self Assessment, and learn how Making Tax Digital will change how you manage your tax returns from April 2024.

Get your free guide

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