Filing a self-assessment tax return is possibly one of the most dreaded tasks that any freelancer goes through, and if you’re just starting out on your self-employment journey, the whole process around self-assessment tax returns can seem daunting and (often) confusing.
In this guide, we’re going to have a brief look at why you need to register for your self-assessment, how you go about registering, and ways you can get help with completing your self-assessment.
Why do I need to register for self-assessment?
If you are self-employed then you are legally required to register for self-assessment tax returns. This means that each year you need to tell HMRC how much you have earned, and what business expenses you have incurred throughout the year. From this, they will work out how much tax and national insurance contributions you need to pay for that year.
So how do I register for and activate self-assessment?
When you’re initially starting out as self-employed, it’s best to register with HMRC as soon as possible. If you forgot, don’t worry. You do technically have until the deadline of 5 October (after the end of the tax year during which you became self-employed). Don’t forget, a tax year is the same as a financial year and runs from April to March, rather than January to December.
Once you’re at the stage that you need to register for self-assessment, the process itself is actually quite simple. Go to the HMRC website and search for ‘register for self-assessment’ where you will be guided through the registration process. The process includes creating a Government Gateway account where you will submit your return each year.
You’ll then need to wait for your details to come in the post, and finally complete the registration online using the details you have been sent.
Once you have registered you will get regular emails and texts from HMRC at key times of the year to prompt you to begin the process of your self-assessment tax return.
When do I complete my self-assessment?
The self-assessment deadline for submitting your annual tax return is 31 January. The period you are reporting on is the previous financial year. So, if you’re about to submit a return in January 2019, you’ll actually be reporting on the year 2017-2018.
It is usually a very good idea to get a process for monitoring and recording your income and expenditure throughout the year up and running when you begin your business, it’ll save you time and effort later on.
If you continue to use that system each year, when it comes time to do your tax return you have most of the information ready and at hand for inputting into the report.
You can do the recording of your finances yourself using an Excel spreadsheet, or you can set up and use specialised accounting software. You can also hire a bookkeeper or accountant to manage your day to day and monthly finances if you don’t have time to do it yourself.
Get help registering for and filing your self-assessment
If you find the HMRC website confusing or you don’t have the time to do the registration or tax return yourself, then you can get help in almost every step of the self-assessment process by hiring an accountant or bookkeeper. At Profile, we have over 16 years’ accountancy experience and specialise in helping small and medium sized companies prepare and submit accounts and tax returns.
Getting self-assessment tax return help takes the entire worry out of the process as you will be hiring a knowledgeable professional to help you. For people who are new to accountancy, or people who hate paperwork – it’s an ideal solution to hire someone to help.
It might seem daunting when you first begin your self-assessment journey, but with the right help and guidance, you can take the hassle out of the process and spend time doing the work that you love instead. We hope that this guide to the process of registering for self-assessment has helped to clear up any confusion over the steps you need to take, and we’d love to hear from you if you have any further questions.