A Step-by-step Guide to Completing Your Self Assessment

The annual Self Assessment deadline is amongst the most dreaded days of the year for the self employed. January 31st is a date imprinted on the minds of millions as the very final moment by which you can submit your Self Assessment tax return online without incurring a financial penalty.

If you're unsure what income sources you need to declare or which expenses you can claim, you might find it helpful to use our free Self Assessment Helper.

HM Revenue and Customs looks set to phase out paper tax returns altogether (normally due on October 31st), and have already begun the process by taking the VAT Return Process online. Given that you will soon have no choice but to file online, it makes sense to familiarise yourself with the process now.

Registering to File Online

The first step to completing your Self Assessment is to acquire a Government Gateway username and password. You will require these codes to access many of the Government’s online services. These are posted, rather than displayed on screen, and can take up to seven days to arrive – so make sure that you allow enough time.

The most important element of the Self Assessment process actually begins well before you begin filling out the form. In order to make filling in your tax return as simple as possible, you must keep accurate and detailed records throughout the year. It is particularly important that you keep details of your income; this is likely to be in the form of invoices, backed up by bank statements. You must also keep comprehensive records of all business expenditure. This may be in the form of invoices or receipts.

You should consider logging your income and expenditure in accountancy software ‘as you go’. A good accounting package is an excellent investment; it will streamline your record-keeping and save you a vast amount of time each January. It is perfectly possible to find simple, scalable software for less than £100.

Self Assessment Helper

Confused by self assessment? Tell us about your income and circumstances and get a clear guide to what you need to declare, what you can claim, and the key deadlines.

Try our Self Assessment Helper free, here on this site →

The Tax Return Process

The tax return itself is made up of several different sections. All self assessment taxpayers need to fill in the boxes on income; if you are self-employed you will probably need to do this in the ‘Self assessment (short)’ section. If you are reporting offshore income, pension income or other non-employment income, you will need to fill in the relevant ‘additional pages’.

You will also need to fill in the section on allowable expenses. You must insert the total allowable expenses incurred during the relevant tax year in box 19, and you may be required to break these down in boxes 10 to 18. This covers regular expenditure made during the day-to-day running of your business. The cost of equipment or machinery (like a computer, for example) should instead be included in the section on capital expenditure.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

Calculating Taxable Income

Finally, you will certainly be required to fill in the boxes that ask for your total taxable profits for the year. The online form may be able to complete this calculation for you; if not, you will be required to deduct your Allowable Expenses and any losses made from your total income. From this you then deduct your personal income tax allowance.

You should also remember that you may be required to make Student Loan repayments. Similarly, if you are self-employed, you will almost certainly have to make Class 4 National Insurance Contributions. These, along with your payment on account for next year, will be added to the total amount you owe. The outstanding balance for the previous tax year, along with your first payment on account, are due on January 31st. Any money you still owe after this date will be subject to interest.

The Self Assessment process need not be too difficult. However, in order to keep your workload down you must ensure that you keep accurate records throughout the year. If you have any difficulty, contact an accountant.

For more information, read our Handy Guide To Self Assessment Deadlines article on this site.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Self Assessment Helper lets you confused by self assessment? Tell us about your income and circumstances and get a clear guide to what you need to declare, what you can claim, and the key deadlines. Try it now →