The thought of filing your tax return may fill you with dread, but there is lots of help available to make the process easier.
Of course, not everyone has to file a tax return. For the majority of people who work through a pay-as-you-earn, or PAYE, system, taxes are deducted before you receive your wages.
However, if you are self-employed, earn an extra income – such as renting out a home you own – or you need to apply for benefits, such as Maternity Allowance or Tax-Free Childcare, you may need to fill in a self-assessment tax return.
There are lots of tax services that can help you do this, well within the time frame to avoid paying a penalty for filing or paying your taxes late.
What is the tax year?
Unlike the calendar year, the tax year runs from 6 April to 5 April the following year. This is the period you need to inform HM Revenue & Customs (HMRC) about your income, and you will then need to pay tax and National Insurance contributions on anything you earn during this time.
For example, the 2023/24 tax year runs from 6 April 2023 until 5 April 2024.
If you need to file a self-assessment tax return, this means you must tell HMRC how much you have earned in the previous year, and work out how much tax and National Insurance you now need to pay.
What are the key tax dates for 2023?
There are a few key dates within the tax season you need to be aware of. If you need to file a tax return for the last tax year (2022/23 – from 6 April 2022 to 5 April 2023) then the following deadlines apply:
- 5 October 2023: This is the deadline for registering for self-assessment online.
- 31 October 2023: If you file a paper tax return, HMRC must receive it by this date.
- 31 January 2024: If you file an online tax return, you’ll need to do it by this date, and pay any tax and National Insurance contributions due.
- 31 July 2024: In some cases, you may need to make two payments during the year and this is the second date, after the January payment.
Who has to prepare a tax return?
If you are self-employed you’ll need to register for self-assessment. You need to do this if you have not registered before, or if you didn’t last year.
You need to register before you can submit a tax return. If you register using a paper form, HMRC will send you a code by post, which you’ll need to use to activate your online account. The registration process can take a few weeks, so make sure you leave yourself enough time.
Self-assessment is not just for self-employed people either. There are many other reasons why you may have to register including the following circumstances:
- You have rental income from a property.
- You have income from savings, investments, and dividends.
- You are a high earner (with a salary over £50,000) and you need to pay the High Income Child Benefit Charge.
- You earn more than £2,500 making money from your property (for example, by renting it out as a holiday let). You should contact HMRC if you earn between £1,000 and £2,500 this way.
- You earn foreign income.
When should I start preparing my taxes?
It’s always good to be prepared, and it’s no different with your taxes. Sorting out your tax return soon after the start of the new tax year can help you stay on top of your finances. Getting it done sooner rather than later also means you’ll avoid a £100 penalty. This applies for filing up to three months late, but it can be more if it’s later than this.
When you file a tax return, you will provide details of income you earned during the previous tax year. For example, if you are filing an online return in January 2024, this will relate to your income in the 22/23 tax year (from 6 April 2022 to 5 April 2023).
The deadline for filing your paper tax return is 31 October, or 31 January of the following year if you file online.
How long does it take?
This really depends on your circumstances and how simple, or complicated your taxes are. The best way to cut down the length of time it takes is to start early and keep your finances organised throughout the year. Filing invoices, receipts and any other financial documents in a safe place when you receive them is a good start.
It’s also wise to keep an online record of all the money you earn, dates when you’re paid, and to keep documents, such as a P45 or P60, in a safe place as you may need these when filing your return. HMRC can also ask to see your records after you’ve submitted your return, so you must keep these for five years after the tax year in question.
How can I organise my tax documents and what do I need?
You will need the following documents for your return, but depending on your income and profession, you may need more:
- Your 10-digit Unique Taxpayer Reference (UTR) – you’ll be sent this when you register as self-employed.
- Your National Insurance number – you can find this on any pay slips or documents from HMRC.
- Details of any business expenses you have incurred.
- The details of your income from the tax year, which you have earned without paying tax.
- Other untaxed income, including dividends from shares or interest on savings (except for interest, income or capital gains from individual savings accounts, or ISAs, which are tax free)
What tax services are available to use?
There is a lot of help on the government website, ranging from the very basic tools for filing your return to specific help for different professions. There are also handy videos on its YouTube feed and virtual seminars you can sign up to for free.
You can call the government tax line on 0300 200 3310 with general enquiries about filing. Other ways to contact HMRC can be found on Gov.uk.
What’s the best way to prepare your own taxes?
Starting early and being as organised as possible can help you prepare your own taxes. This means keeping a record throughout the year and not waiting until the last minute.
There are a number of tools and apps designed specifically for freelance workers which can help. In addition, you may want to consider using accounting software.
How much does it cost for someone else to prepare my taxes?
There is nothing to stop you paying for an accountant to help you prepare your tax return. They can file your return for you, for a fee. The cost will vary depending on the accountant and the amount of work involved but typically it can be between £150 and £250, according to unbiased.co.uk.
Do I need to complete a UK tax return if I am a non-resident?
Even if you’re not a UK resident, you may still need to pay Income Tax in the UK. This includes if you have income from a UK pension, interest from a UK savings account, or if you’re paid through the UK. There is a full list on the government website.
If you are not resident in the UK but let property or are self-employed here, you may have to submit a self-assessment tax return. You may also need to include any pension you claim outside the UK and any other untaxed income.
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