Tax can feel complicated if you are new to the system. In UK individuals report their income and pay taxes is through the HMRC Self-Assessment tax return. This blog will guide you regarding the basics of HMRC Self-assessment Tax Returns.

What is a Self Assessment Tax Return?

It is a report card for your finances. Each year, HMRC asks certain people, like self-employed individuals, freelancers, and those with multiple sources of income, to fill out a form detailing their earnings, expenses, and any tax owed. To ensure that everyone pays the right amount of tax HMRC is used.

Who Needs to Fill Out?

If you get your taxes through pay as you earn (PAYE) your employer probably deals with it and therefore you have no reason to worry. You will need to pay tax and therefore you will need to file your tax return if you are self-employed, a freelancer, a landlord or if you have any other source of income such as investments or rents.

Important Dates:

In United Kingdom, the tax year is from 6th April in a year to 5th April the next year. 

1. April 5th: Last day of tax season.

2. October 5th: For those who have decided to register for Self Assessment for the first time, please do so.

3. October 31st (or December 31st if filing online): Due date for filing of paper tax returns.

4. January 31st: Self-assessment tax returns are filed online and in case of any amount outstanding this has to be paid.

Documents required for HMRC Self-Assessment

1. Your Unique Taxpayer Reference (UTR) number – If you do not have any, you will have to apply for one from Her Majesty’s Revenue & Customs (HMRC).

2. Employment and self-employment – Wages, salaries, bonuses, tips, freelancing, contract income, royalties, etc.

3. Other expenses – Documentation of any other expenses that are permitted under the law and are in relation to work.

4. Details about any benefits or allowances that you may be receiving.

Step-by-step guide for filing Self Assessment with HMRC.

Registration can be done on HMRC online, with a written registration form; however, most individuals will find the online option to be more suitable. Here's what you will need to do:What you will need to do are the following:

Documents required to file HMRC Self-Assessment

1. Your Unique Taxpayer Reference (UTR) number – If you don't have one, you'll need to 

register with HMRC.

2. Details of your income – This includes earnings from employment, self-employment, pensions, and any other sources.

3. Records of expenses – Keep receipts and records of any allowable expenses related to your work.

4. Information about any benefits or allowances you receive.

How to File HMRC Self Assessment

Registration to HMRC is possible online, as well as by completing a paper form, although most people would find the Internet-based registration to be more convenient. Here's what you will need to do:Here's what you will need to do:

1. If you have not used the Account Registration Service, go to the HMRC website on www. hmrc. gov. uk and use your Government Gateway accounts to log in.

2. To start a new tax return form the correct year that you are required to fill your tax return.

3. Answer the questions that appear on the screen, inputs your income, expenditures, and anything qualifying on that program.

4. Ensure one re-reads every content before uploading to eliminate mistakes.

Calculating Your Tax:

Once you have submitted all your details, the HMRC system will even be able to tell you how much tax you actually owe. This includes anything you can possibly owe in terms of National Insurance contributions. If you have paid all your taxes in advance maybe for a number of months in the year and the amount you paid is more than what is required then you may be owed a refund.

Paying Your Tax:

If taxpayers are in arrears with the payment of tax, the amount due needs to be paid by the end of the first month of the subsequent fiscal year, in this case by January the thirty first. You can do this through the internet, the bank transfer, or directly giving authorization to debit your account. Remember to retain copies of payment confirmed.

Common Mistakes to Avoid:

Tax returns can be tricky, but here are some common pitfalls to watch out for: Tax returns can be tricky, but here are some common pitfalls to watch out for:

1. Omitting some sources of income – Do not leave out any income you received no matter how small or from wherever it came from whether it is from a side hustle business or from the rental of properties.

2. Allowed expenses – this is the area where people often get it wrong, not all expenses can be claimed off and where you can go wrong is by claiming expenses that are not allowable by the law.

3. Delay – Late submission of tax returns as can lead to penalties and thus it is wise to submit it as early as possible.

4. Failure to act or not seeking help when one is not clear on an issue is a common mistake when filling the tax return.

Guiding the world of taxes can be difficult, but with a bit of guidance, it is manageable. It is designed to ensure everyone pays tax on time. By keeping track of your income and expenses throughout the year and these steps summarised in this blog, you will be well on your way to mastering your taxes like a pro.