Self Assessment tax returns for the year ended 5th April 2014 are due to be filed at HMRC by 31st January 2015. Not everyone needs to file a return however, if you do, it can be costly to miss the deadline!
If you have been a company director, for any part of the tax year it is essential you file a Self Assessment return. Regardless if there have been periods when your company did not trade in the tax year, you are still required to file a return. It is your responsibility to register for Self Assessment with HMRC, therefore, if you feel that you should be registered and have not yet done so, give your accountant a call who can help you set this up.
A common misconception amongst contractors is that they only need to report their income from their company on the Self Assessment return – this is not the case. Your Self Assessment is a record of your total worldwide income and should include all sources. Depending on the level of your income and how much tax has been deducted at source you may or may not have a balancing payment to make in January each year.
If your balancing liability is £1,000 or more, HMRC will request a payment on account from you at the same time as you pay your January liability and the same amount again in the following July.
Payments on account are based on your tax liability for the preceding year and will amount to 50% of the liability both in the January and July. Assuming your income for the current tax year is the same as the previous, no balancing payment would be due with your next Self Assessment. If your income turns out to be less than expected you will be due a refund and if it is more, you will have a smaller balancing liability to pay.
If Self Assessment still seems confusing read our guide in our knowledge hub or speak to your accountant.
