Preparing for the Self Assessment deadline

As another tax year comes to a close, individuals and businesses in the UK find themselves facing the familiar annual task of preparing their Self Assessment tax returns. The Self Assessment deadline for the 2024/25 tax year is just around the corner, and proper planning and organisation are key to a hassle-free tax season.

In this Quickbooks blog, we're here to guide you through the essential steps to ensure you meet your Self Assessment obligations efficiently and without stress. We'll provide you with a clear overview of the key dates and deadlines for the upcoming 2024/25 Self Assessment.

Meanwhile, we’ll also explore how Quickbooks’ intuitive software can help you in organising and navigating the Self Assessment process. 

Self Assessment 2024/25 deadlines for sole traders and Self Employed

Filing your Self Assessment tax return involves more than just meeting the 31st January deadline. To ensure compliance, it's crucial to stay on top of all the numerous dates and deadlines.

With this in mind, here's a comprehensive guide to the key dates for the Self Assessment 2024/25. Please note that all dates refer to the midnight of the day in question, not the midnight following the previous day. 

5th October - Register

If your income exceeds the trading allowance and isn't taxed at source (e.g., through PAYE), you must register for Self Assessment. The registration deadline for the 2024/25 tax year is 5th October 2023, which is the second year of your business. Failure to register by this deadline may result in fines.

31st October - Paper tax return

While HMRC encourages online filing, certain situations may require you to file a paper tax return. Paper returns must be submitted by midnight on 31st October following the end of the relevant tax year.

30th December - PAYE payment collection

If you owe less than £3,000 in Income Tax from self-employment and are employed or receive a company pension, HMRC can adjust your PAYE tax code to collect owed tax from your salary or pension payments. To utilise this method, submit your Self Assessment tax return by midnight on 30th December following the end of the relevant tax year.

31st January - Online tax return and paying your bill

The crucial deadline for submitting your Self Assessment tax return online is midnight on 31st January. Along with filing, you must pay your tax bill by the same deadline. Completing your tax return early provides ample time for payment. 

Quickbooks and similar software simplify this process by auto-populating data and streamlining filing to HMRC. For full information on payment methods, consult HMRC's guidance on sending tax returns.

31st January - First Payment on Account

If your Income Tax bill was over £1,000 and you paid less than 80% of owed tax at source, you must make an advance payment towards the next year's Self Assessment. Known as a payment on account, this is typically half of the previous year's tax bill. 

In your first year of business, you pay this along with the first year's full bill.

31st July - Second Payment on Account

For businesses making payments on account, the second payment is due on 31st July. This payment is also equal to half of the previous year's tax bill. It's designed to ensure that your tax bill is covered by the end of the tax year. When filing your next tax return, any overpayment or underpayment will be reconciled.

Understanding these critical Self Assessment dates and deadlines is essential to managing your tax obligations effectively. Quickbooks can assist you in staying organised and prepared for each milestone in the Self Assessment process.

So, to summarise the key dates for the Self Assessment 2024/25:

Keep reminded with a Self Assessment calendar

Staying on top of your Self Assessment obligations is essential to avoid any last-minute rush and potential penalties. To help you maintain a proactive approach, consider downloading our Self Assessment calendar.

This valuable tool will serve as your personal tax deadline tracker, ensuring you never miss a crucial date. It includes all the key dates mentioned above, from the registration deadline in October to the final payment on account in July. Setting reminders for each of these milestones will help you plan your tax responsibilities well in advance.

Important changes for tax year 2024/25

There are some important changes coming into place for the tax year 2024/25, and it is important to be aware of these as they may affect your earnings, your pension contributions, or your tax rates. These are as follows:

New Lump Sum Allowance (LSA)

As of the 6th of April 2024 the Lifetime Tax Allowance (LTA) has been replaced by the Lump Sum and Death Benefits Allowance (LSDBA) and the Lump Sum Allowance (LSA). Here are the new rules for lump sum tax:

New lump sum rules:

Lump Sum Allowance (LSA): This is set at £268,275. It limits the amount you can receive tax-free from your pension during your lifetime.

Lump Sum and Death Benefit Allowance (LSDBA): This is set at £1,073,100. It limits the total tax-free amount you can receive from your pension both during your life and after your death.

New income payment rules:

You can take income payments from your pension without restrictions, but these are generally subject to income tax.

Protected allowances:

If you had protections under the old LTA system, you might have higher LSA and LSDBA limits. Complex transitional arrangements may apply, so professional advice is recommended.

How to prepare for the Self Assessment deadline

If you’re not already registered

If you find yourself needing to send a tax return to report taxable income to HMRC via Self Assessment, and you did not do so in the previous tax year, you must register. This applies even if you've filed tax returns in the past. 

The registration process can be conveniently completed through the government website. It's important to note that the registration rules may vary slightly depending on your specific Self Assessment circumstances.

Once you have successfully registered for Self Assessment, you gain access to the platform to fill in and file your annual Self Assessment tax return. 

If you’re already registered

If you've previously registered for Self Assessment and are familiar with the process, you're one step ahead in the game. Here are some key steps to ensure a smooth and successful experience when preparing to fill in your Self Assessment tax return:

1. Choose how you’re going to file

The first step in preparing for your Self Assessment is choosing how you’re going to file your tax returns. HMRC encourages the use of digital tax records and online filing, as opposed to paper returns, which can be time-consuming and lead to more mistakes. 

In contrast, opting for online submission of your Self Assessment tax return offers several advantages. It's a quicker and more user-friendly process, particularly when utilising specialised Self Assessment tax return software to get prepared, like Quickbooks. 

This software often includes automated prompts, guiding you on where to input specific figures, thus enhancing accuracy and reducing the risk of overpaying your taxes.

2. Know what supplementary pages you need to submit

Several supplementary pages may be required for your Self Assessment tax return, and it’s important for you to consider what you’ll need to fill out. Common examples include those for self-employment (SA103), property income (SA105), and capital gains (SA108), among others.

Each supplementary page serves to report income from these specific sources that hasn't been subjected to taxation. Additionally, you are responsible for declaring any allowable expenses relevant to these income sources, which will be subtracted from your overall tax liability.

For instance, when completing the self-employed form (SA103), you'll need to report your turnover within the business income section and itemise any relevant expenses. In case you received a self-employed income support grant, it should be declared under the 'Other tax adjustments for your business trading name' section.

In contrast, landlords using the SA105 form should record their income from rented properties in two distinct sections and can claim expenses related to rates, insurance, ground rent, repairs, loan interest, and other professional fees.

As for the capital gains form (SA108), it entails declaring 'disposal proceeds' for residential and non-residential properties, shares, and securities. You can also make claims for 'allowable costs,' encompassing the initial purchase price of the asset and any expenses related to its improvement.

3. Ensure you know your UTR (Unique Taxpayer Reference)

A Unique Taxpayer Reference (UTR) is a vital element for your SA100 tax return. This is assigned when registering for Self Assessment. To locate your UTR, you can refer to your prior tax return, provided you've submitted one.

If you can’t find out your UTR, reach out to HMRC. Ensure you have essential information on hand for security verification, including personal details and your National Insurance number.

4. Gather other vital information

Before completing your Self Assessment tax return, it's essential to have the subsequent information readily accessible. This will help you to keep on top of every potential input on your tax return form, no matter your circumstance:

• Taxable income details (self-employment, rental income, foreign income).

• Previous losses for offsetting.

• Income from employment and taxable benefits.

• Taxable interest and share dividends.

• Partnership income (with an SA104 supplementary page).

• Taxable state benefits and pension payments.

• Capital gains data (e.g., asset sales).

• Records of received Gift Aid for potential tax reclaims.

Please bear in mind that the provided data should pertain exclusively to the specific tax year for which you're reporting taxable income to HMRC.

5. Organise your expenses

In your Self Assessment tax return, maintaining records of ‘allowable expenses’ is vital. These expenses usually relate to income sources like property rentals, foreign income, business partnerships and more. 

With expense and income tracking software like Quickbooks, you’ll be able to keep track of all your expenses from all sources. This makes the procedure of inputting your expenses into your Self Assessment simple and painless. 

However, you haven’t been able to consistently track your expenses tracking, a thorough review of receipts, invoices, and financial statements will be necessary. This means that using commercial software is often recommended as it not only streamlines expense claims but also offers better insights into financial expenditures.

6. Understand Personal Tax Allowances

Personal tax allowances are integral to tax planning, as they dictate the income threshold exempt from tax. A grasp of these allowances and their applicability in your case aids in optimising your tax status.

Key UK personal tax allowances comprise:

• Personal allowance: £12,570 for the 2024/25 tax year.

• Trading allowance: £1,000 yearly (if not claiming allowable expenses).

• Property allowance: £1,000 yearly (if not claiming allowable expenses).

• Dividend allowance: £500 for the 2024/25 tax year.

• Marriage allowance: Up to £1,260 Personal Allowance transfer to a spouse or civil partner, potentially reducing their tax liability or vice versa.

By following these steps, you can streamline your Self Assessment tax return, alleviating the stress of deadlines and ensuring accurate tax payments. Proactive organisation not only wards off fines but also enhances financial efficiency.

Navigate Self Assessment with Quickbooks

Quickbooks is your trusted ally in navigating the complex world of Self Assessment. With a real-time view of your transactions, invoices, and expenses, you'll always be well-prepared when the time comes to send your tax returns to HMRC.

Our easy-to-use software allows you to automate calculations and categorise expenses, leaving you with more time to focus on your business. This means you won't need to guess your way through your tax return – Quickbooks takes care of the number crunching for you. 

Furthermore, Quickbooks' AI technology goes the extra mile to help you maximise your tax savings. By tracking every business expense and benchmarking your expense categories against similar businesses, Quickbooks keeps you informed about the health of your finances. 

And if you ever have questions or need assistance, Quickbooks has you covered with award-winning experts available through free live chat, seven days a week. With Quickbooks, you're not alone in your journey towards stress-free and efficient Self Assessments.

FAQs

What is Self Assessment?

A Self Assessment tax return is used by HMRC to gather UK Income Tax and National Insurance. While your employer typically withholds tax from your income, you must report it through Self Assessment if you earn additional income from self-employment or side gigs. 

How do I pay for a Self Assessment?

Once you’ve submitted your return, you’ll be told how much tax and National Insurance you need to pay. It’s worth making sure these add up, and keeping good records throughout the year can help with this. 

When it comes time to pay, you can do this through a range of methods, including by debit or corporate credit card, through a bank transfer or in person at your bank. The final payment you need to make is due on the 31st January.

The first time you submit a self-employed tax return, you have to pay any tax due from the previous tax year, as well as half of the tax you expect to pay this tax year. So, effectively you pay 150% of the tax.

You’ll then make a second payment on account by 31 July. Once you are in the payment on account system you’ll only have to make the January and July payments.

Want to get an idea of how much tax you’ll owe this year? Try our Self Assessment tax calculator.

What changes are there in the new tax year?

Alongside Self Assessment, there are also other changes to key thresholds and allowances for 2024/25. The Personal Allowance remains at £12,570, with the Higher Rate of Income tax threshold at £50,270. 

There are also changes to Income Tax thresholds affecting Director Only businesses, with different tax rates applying for Scottish residents. For a comprehensive breakdown of these changes and how they might impact individuals and businesses, you can refer to our informative guide on the new tax year. 

What happens if you miss the Self Assessment deadline?

Missing the Self Assessment deadline results in a £100 automatic penalty from HMRC, regardless of whether you owe tax or not. If you fail to file within three months, you could face an additional daily penalty of £10 for the next 90 days, increasing the total penalty to £1,000. 

Further penalties apply at six and twelve months, potentially based on the amount of outstanding tax. Additionally, interest is charged on any unpaid tax.

If you are submitting a paper tax return and miss this deadline, the same penalty regime applies. 

Did you find this article about the Self Assessment deadline useful? The QuickBooks blog covers a wide range of business-related topics designed to help you grow and develop your business.

Discover the QuickBooks blog.

The information on this website is provided free of charge and is intended to be helpful to a wide range of businesses. Because of its general nature the information cannot be taken as comprehensive and they do not constitute and should never be used as a substitute for legal, accounting, tax or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. Any reliance you place on information found on this site or linked to on other websites will be at your own risk.