If you became self-employed last year, or are planning to go self-employed this tax year, make sure you register for self-assessment before you do anything else.
The deadline for this is 5 October at the end of the relevant tax year.
If you were self-employed during the 2021/22 tax year, you’ll need to register by 5 October this year. If you’re becoming self-employed in the next 12 months, you’ll have to register by 5 October 2023.
You can register for self-assessment on the gov.uk website. It’s a fairly straightforward process, but it can take a while.
First, you’ll need to set up an HMRC business account with a password and Government Gateway ID. You can then apply for a UTR (Unique Taxpayer Reference), which will be sent to you via post. This can take ten working days, so it’s good craic to start the process a few weeks before the deadline.
Complete your self-assessment
If you’ve already registered for self-assessment, you can now file your tax return. The deadline for doing this depends on whether you’re filing an online or paper return:
- The paper return deadline is midnight on 31 October 2022.
- The online return deadline is midnight on 31 January 2023.
- If you make payments on account (paying some of your tax in advance for the following tax year), the deadline for this is 31 July each year.
- You can choose to have your taxes automatically deducted from your pension or another source of income. If you do this, the deadline for filing your return is 30 December 2022.
If you’ve completed an online self-assessment before, you’ll find that much of your information is already stored. The process might be a bit of a ball-ache, so make sure you leave plenty of time
You’ll be asked for details of earnings, expenses, interest on savings, and any charitable donations you’ve made, so make sure you have this information to hand.
Send self-assessment payments
Once you’ve filed your tax return, HMRC will contact you to tell you what you owe. If you file an online return, you’ll have received a final calculation during the submission process.
Unless there are any major issues with your return, you’ll be able to pay this amount through your business account within 72 hours. If you file a paper return, you’ll receive a bill in the post.
The final deadline for payments is 31 January 2023, no matter how you want to file your return. It’s the same as the final submission date for online returns, so be wary of leaving it until the last minute.
Get ready for MTD
The government is planning to digitise the entire tax system by the end of the decade, self-assessment included. The MTD (Making Tax Digital) scheme is being rolled out in stages.
It already covers VAT payments, and the next stage is income tax – something that’s been pushed back a year, so will now come into effect in April 2024.
Under MTD, you’ll need to submit a digital tax return four times a year instead of annually. You’ll be required to keep some kind of electronic records using the right accounting software. This is still some way off, but it’s always worth getting a leg up on stuff where you can.
You can use the next two years to look at the available software, and get to grips with the one you like best. Keeping these electronic records now will also make the transition easier in 2024.
Self-assessment can be really confusing at first, but the more you do it, the easier it gets. We’ve got years of experience helping self-employed tradesmen with their taxes, so we know how to get it done, and will always give you a straight answer.
Give us a shout to find out more.