Whether you’re a new business owner or started a side hustle, chances are you’ll have to pay tax on your earnings, writes HMRC deputy director for Self Assessment Jashoda Pindoria.
With the deadline for filing Self Assessment and paying the tax fast approaching, below is the latest guidance on what to do.
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Self Assessment is how the self-employed and sole traders pay tax on their income.
People are usually taxed automatically through their pay from their employer, but if you’re self-employed as a contractor or freelancer, or if you haven’t been automatically taxed (for instance you rent out a property) you may need to declare your income by completing a tax return and then pay any tax owed. The current Self Assessment reporting period is for 6 April 2024 to 5 April 2025.
People who are new to Self Assessment can use the ‘check if you need to send a tax return’ tool on GOV.UK to see if they need to complete a tax return. They can also watch our helpful YouTube videos which take you through the online registration process.
Once registered, HMRC will send you your Unique Taxpayer Reference (UTR), a 10 digit number that is used to identify your Self Assessment tax record. Your UTR is also stored in the HMRC app or your online account.
You can then complete your tax return online via GOV.UK.
When you’re ready you’ll need your UTR and National Insurance number, as well as details of your income, earnings, savings interest and other financial records.
The deadline for submitting your Self Assessment return online and paying your tax for the 2024 to 2025 tax year is 31 January 2026.
If you miss the deadline, you could incur penalties.
If you have paid too much tax, we’ll let you know and repay you once we’ve processed your Self Assessment return. You can also check if you’re due a refund in the HMRC app once you’ve filed your return.
If you think you may struggle to pay your tax bill, please get in touch with us to let us know. There are a range of payment options, that could be available to you including a Budget Payment Plan where any payments you make will be used to pay your next tax bill.
You may be able to set up a payment plan yourself. The plan, known as a ‘Time to Pay’, means eligible customers can arrange to pay their tax bill in regular instalments over an agreed period.
Don’t ignore an HMRC letter reminding you to complete a tax return, even if you think you haven’t got anything to pay.
Get in touch with us if you don’t think you should complete one as you could receive a penalty if we’re expecting a return and don’t receive one.
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