Tax Help for the Self Employed

The best thing about being self employed is being your own boss. However, while filing taxes, it can become difficult for a self employed person to know exactly what to file, when to file, and how to do it.

Any UK resident who is self employed needs to complete a self assessment tax return every year. This also pertains to an individual who is a partner in a business partnership. For this, an individual needs to register for self assessment before he or she can actually get a tax return form from the HM Revenue and Customs or HMRC.

While most taxpayers are taxed at source, that is, tax is already taken from the money that they earn, self employed individuals have to calculate and pay their taxes to the HMRC within six months of the end of the tax year. This can become quite difficult and cumbersome for anyone who does not really know how much they owe in taxes.

Registering for self assessment can itself prove to be quite a difficult task to understand. You need to register by 5th of October after the end of the tax year. For this, you will need your National Insurance number, your contact details, the contact details of your business, and the date that you became self employed.

Once you have registered with the HMRC, they will be using the information provided to set up your records and then issue a Unique Taxpayer Reference or UTN. This means that every year you will be receiving a letter from the HMRC to complete your tax return. The letters are usually sent in April and you will be required to file your tax returns on paper or online.

Filling up the forms can be quite difficult a task, especially if you do not have your annual records in order. You will need to provide information about the profits that you have earned from your business of profession and any other income that you may have had. This is then used to calculate how much tax you are required to pay and how much you have to contribute towards National Insurance.

If you are filing tax returns in paper form, you need to do this by the 31st of October after the end of the tax year. For online filing, you can do so by the 31st of January. Delayed filing of tax returns attracts a penalty, so make sure that your returns are filed in time even if you do not owe anything in taxes.

There may be quite a few forms to be filled depending on your circumstances. HMRC usually sends the core forms, that is, SA100 and SA101 for Self Assessment. However, for any self employed individual, another form needs to be completed, either SA103S or SA103F depending on your annual turnover.

Anyone who is self employed in a business partnership will be required to complete either a SA104S or SA104F. This will depend on the type of income that you are earning in the partnership. An individual can use these forms to detail their share in the profit or loss in the partnership.

In some cases, an individual may be working as an employee in another business and be self employed. This will require the person to fill form SA102.

Keeping proper business records in this case is essential and these need to be kept for at least five years after filing your tax returns. You can use an accountant to help maintain your records and take care of the Self Assessment registration and filing.

The process is supposed to be simple, however, many individuals find it quite stressful to actually complete the forms and submit them on time. This is where good accounting services can come in handy. For nominal charges, these services can provide you with all the tax help that you may need in keeping your records and using the information to complete the forms and submit them.

Keep in mind that you may have to pay penalties or additional charges if you are late in submitting your Self Assessment forms. So, if you think that you really do not know much about how to complete the forms correctly or just do not have the time and energy to do so yourself, a good accountant can provide the needed tax return help.