Withthe start of a new tax year just around the corner, it’s a good idea to startgetting your finances in order so that you don’t have a last-minute panic.

Last year, 12.5 million taxpayers submitted their tax returns to HMRC on time, with 778,068 submitting it on the deadline day. 32,958 submitted it between 23:00and 23:59 on the 31^st January 2024!

Accordingto ‘Which?’, in a November 2022 survey, 31% of people who had filed a tax return before, saidthe thing they disliked most was worrying about making a mistake.

But it really doesn’t need to be this difficult, particularly if you keep yourfinances up-to-date throughout the year. Our team supports thousands of freelancers and small businessowners to manage their accountancy online, including their Self-Assessment Tax Return.

Here we explain more about what’s involved.

Who needs to complete a Self-Assessment?

You will normally need to complete a self-assessment if you areself-employed or a director / shareholder of a limited company. We can register you forself-assessment and prepare and submit your tax return on your behalf. Thisensures everything is done correctly and makes life easier for you. With adedicated accountant by your side, all you have to do is pay your tax bill usingthe verification HMRC sends when they confirm receipt of your tax return.

What to include in a tax return?

To complete your tax return, it is necessary to document allyour income sources over the year. If you are a company director and your onlyincome is a salary from your business, that’s what should be recorded on thetax return.

If you’ve received dividend payments or income from otherinvestments and shares, or an asset such as a rental property, this will needto be detailed too, as will any pension contributions, state benefits andcapital gains (such as a property you’ve inherited and disposed of) and lumpsums such as redundancy payments.

How is tax calculated?

The amount of income tax you must pay is based on types ofearnings you have, above the personal allowance of £12,570 for the year endedon 5th April 2024 and 5^th April 2025. Your employment income is thentaxed according to which ‘Band’ it falls in to:

Up to 5th April 2024:

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From 6thApril 2024, all of the tax bands will remain the same:

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Dividends are taxed at a separate rate to earned income (employment and self-employment income. The following rates for tax on dividends apply up to 5thApril 2024:

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From6^thApril 2024, the Dividend Allowance of £1,000, will reduce to£500.

Deadlines and penalties

Below are the deadlines for registering for, submitting and paying your Self-Assessment Tax Return for the year ended on 5th April 2024. If you’re late, HMRC will impose an automatic late filing penalty of £100, plus potentially other charges and interest, depending on when it is submitted.

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Other Key Dates

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You will need to submit your online return by 30th December 2024, if you want to request HMRC to automatically collect any tax from your wages or pension.

Last year, a total of 25,769 people submitted their tax returns between 24th and 26th December 2023, with 4,757 taxpayers filing on Christmas day! We’re sure you’ll agree that it’s much better to be organised in advance so that you can forget about taxes into the summer months, before it you even get to the festive period.

The penalties for filing a tax return late are:

• £100 fixed penalty for late submission, even if there is no tax to pay, or if the tax due is paid on time
• after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
• after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
• after 12 months, another 5% or £300 charge, whichever is greater

There are also additional penalties for paying late - 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late.

For more information on any aspect of limited company accountancy or help with preparing your tax return, please get in touch.

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