Simply put, this is a specific way of paying tax in which you are responsible for getting everything together and filing a return. This can be filed online or via paper documents, and it will include all of your taxable income and capital gains, along with any tax allowances or reliefs that you've claimed. 

A Self Assessment is sent to HMRC, and it stipulates how much tax will need to be paid. This is then checked, with confirmation coming through to your Government Gateway account, confirming how much you need to pay. 

Each year, a Self Assessment needs to be submitted to cover the previous tax year. For the upcoming deadlines, you're looking at between 6 April 2020 and 5 April 2021. The deadline to submit your return for that tax year is January 31st 2022 - and this is also the deadline to pay the tax you owe. 

If you are submitting it via a paper form, the deadline for submissions is 31st October 2021. You also need to register for Self Assessment by 5th October 2021 to submit a tax return for the previous tax year. 

The good news is that not everyone needs to file one of these tax returns. If you are in full-time employment and get paid via PAYE, you WON'T need to file a Self Assessment - unless specific criteria are met, which we shall discuss shortly. The reason you won't always need to submit an SA is that you are already paying tax through your job. 

● Anyone that is self-employed - and earned over £1,000 before any tax relief has been taken off

● Anyone that's a partner in a partnership business

However, you only need to register to file a Self Assessment for the upcoming January 2022 deadline if you were either of the above in the last tax year. So, if you started being self-employed or became a partner in a partnership business on 6th April 2021, you aren't eligible to submit a Self Assessment for the previous tax year. Instead, you should still register and be ready to pay tax next year for the upcoming tax year. 

HMRC stipulates that you will not usually need to send a return if your only income is from wages or pension. However, some people with full-time jobs or pensions may need to file a Self Assessment under the following conditions:

● You earn money from rental properties 

● You get extra income from tips and commission

● You generate income from savings, investments and dividends that's greater than £10,000 before tax

● You earn foreign income that needs to be taxed in the UK

● Your annual income is greater than £100,000 before tax

As a general summary, Self Assessment tax returns are mainly for people that don't pay tax through the more traditional means of PAYE. Still, there are some unique cases where you will need to file an SA even if you are paying tax through your job. 

Firstly, you need to understand that HMRC won't contact you and tell you to fill in a Self Assessment. This is something you need to notify them of, and it's done by registering an account and filing your first return. If you fail to notify them, and they find out, you can be hit with big fines and penalties. 

For those of you that need to file an SA and miss the deadline for submission or payment, the current fines are as follows:

● £100 is your SA is up to three months late

● Interest charged on late payments - this can vary and will increase depending on how late you are

Overall, it's vital that you understand if you need to file a Self Assessment, and how to file one. If you need help with this, contact the Smart Solutions Taxation & Accounting team today, we're an experienced and friendly UK firm that will help you work out if you need to file an SA, then get everything sorted correctly and before the deadlines.