How do I register for Self Assessment?
If you’ve ever been self-employed, made some extra cash with a side-hustle, or made any income from savings, investment or foreign income, then chances are you will have come across Self Assessment forms.
There are currently 3.2 million sole proprietorships in the UK and the lure of being your own boss is pulling many out of corporate life and into the world of the self-employed.
When you’re employed and paying tax via PAYE, income tax isn’t something you need to worry about, beyond checking that you have the correct tax code on your payslip. Once you start earning money through your own venture, through savings, renting a property or other investment, then paying tax becomes your responsibility. This is where Self Assessment comes in and, like other dealings with the taxman, it can leave some in a cold sweat.
However, Self Assessment and paying taxes don’t have to be scary! It can actually be quite simple once you know the basics. If you get stuck or have particularly complicated accounts then there are professionals out there who can help you, but there’s no reason why you can’t tackle Self Assessment yourself.
In this article, we’ll look at how you can register for Self Assessment and whether you need to. We’ll also look at some of the finer details such as how much tax you can expect to pay and key dates to remember if you’re responsible for filing your own taxes. Let’s dive in!
How do I register for Self Assessment?
If you’ve never filed a Self Assessment form before, then the first thing you’ll need to do is create a personal or business tax account. You’ll need a Government Gateway user ID and password, which can be easily set up by going to the HMRC login page, clicking the green sign-in button, and then choosing “create sign-in details”. Once that’s done, you’ll receive a letter with a 10 digit number which is your UTR (Unique Taxpayer Reference). Make sure you keep this somewhere safe, as you’ll need this to file your return.
If you have returned a Self Assessment before (but not last year), then simply sign in using your Government Gateway details and re-register online. Then, just fill in form CW1F. If you want to register by post, then you can fill in this form online, print it and post it directly to HMRC. If you registered for Self Assessment last year, then you don’t need to do so again.
Who needs to register for Self Assessment?
If you are Self Employed, or a sole trader, then you need to register for Self Assessment. However, if you are employed and pay taxes through PAYE, but also earn money through other ventures such as freelancing, then you will need to register for Self Assessment if you earn more than £1,000 per tax year.
If you bring in money from other additional earnings such as tips, a rental property, foreign income, investments and dividends, then you will need to register for Self Assessment, as long as this money comes to more than £1,000 per year.
You’ll also need to file for Self Assessment if you want to tax relief on employment expenses that are over £2,500 in a year, or if you need to pay capital gains tax.
Can I register for Self Assessment online?
Yes, you can register for Self Assessment online. Doing your taxes online can be faster and more convenient, but remember, you still need to allow time to receive your UTR (which takes about 10 days) and find and fill in all the necessary details, so make sure you don’t leave it to the last minute.
If you prefer, you can register and fill in your tax return by post, but you’ll need to allow a little longer to make sure that everything has been received on time. If not, you could end up with a fine.
When to register for Self Assessment
The deadline to register for Self Assessment is the 5th of October after the end of the tax year when you became self-employed. For example, if you started your own business in September 2022, and were earning more than £1,000, then you’ll need to register by the 5th of October 2023. If you fail to register by this time, then you could be fined.
Key dates to remember
When you’re responsible for paying your own taxes, there are several key dates that you will need to remember.
Make sure that you have the following dates locked in your calendar as a minimum:
- Deadline to register for Self Assessment: October 5th
- Sart of the new tax year: April 6th
- Deadline for online Self Assessment tax return: January 31st
- Deadline for paper Self Assessment tax return: October 31st
- Deadline to pay tax you owe: January 31st
How to fill in a Self Assessment tax return
Before you sit down and start to fill in your Self Assessment form, make sure you have all the information you need to hand such as:
- Your Unique Taxpayer Reference
- Your National Insurance number
- Full details of any freelance or self-employed income
- Any expenses incurred while self-employed
- Your P60 (if you have one) to show how much tax you’ve already paid this tax year
- Any benefits or pensions you’ve received over the year
Due to the amount of detail needed to fill in your Self Assessment, it’s wise to keep a record of all your expenses and all your invoices in a safe place.
Before starting, read any help and information notes provided, as these will likely answer any questions you may have, especially if this is your first time filling in a Self Assessment form.
You can then fill in the SA100 form, which is all that most people will need to do. You’ll need to submit your income, whether that’s from work, or dividends from shares or taxable interest from savings. You’ll also need to declare benefits and pensions that you receive well as student loan repayments.
How much tax will I pay if I’m self-employed?
Everyone is entitled to a personal allowance of up to £12,570, which you don’t have to pay tax on. After that, you will need to pay tax, depending on which tax band you fall into.
Below are the different tax bands and the amount of tax you will pay on each one:
|Band||Taxable Income||Tax Rate|
|Personal Allowance||Up to £12,570||0%|
|Basic Rate||£12,571 to £50,270||20%|
|Higher Rate||£50,271 to £150,000||40%|
|Additional Rate||Over £150,000||45%|
How much should I put aside for my Self Assessment tax bill?
You need to make sure that you budget for your tax through the year to make sure that you can afford to pay your tax bill. HMRC has a tool that you can use to get an idea of how much tax you’ll need to pay.
Alternatively, some professionals recommend that you save around 30% of your profits and put them towards your tax bill. However, if you have some slower months with less profit, then you may need to put less money away to cover your other bills.
How do I pay my Self Assessment tax bill?
You can pay your tax bill all in one go, or in weekly or monthly payments. You can pay by Direct Debit, with a debit or credit card, through online or telephone banking. You could even send a cheque in the post, although this will take longer and you’ll need to allow at least five days.
Self Assessment can be a breeze
Tax can make some people nervous, but registering and filing a Self Assessment form doesn’t have to be scary. Once you’ve mastered the basics, you’ll find that you don’t need to hire a professional to handle your taxes, you can handle it all yourself. Just leave yourself plenty of time and you’ll find that Self Assessment can be a breeze!