Contractor Self Assessment Tax Return guide

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Introduction 

This is our official HMRC Self Assessment tax return form (SA) guide for website members and visitors. Indeed, many of our website members are UK contractors and small business owners. This SA tax return guide for contracting professionals has some excellent tax return advice (SA). We’ll review the SA return in fine detail and explain how to complete this. If you submit your SA return yourself, this guide will assist you when you complete your contractor Self Assessment (HMRC). Furthermore, our UK tax Self Assessment guide will help you understand the deadline for filing your tax return with HM Revenue & Customs (HMRC). In addition, our contractor tax advice advises what else you must consider under SA and what to do when completing your contractor tax return.

In this contractor Self Assessment tax return guide, it is key to note that the SA process is in place for UK residents who have underpaid tax over the tax year. Through the SA system, and as part of filing a UK tax return, they’ll pay over any outstanding tax due on their overall taxable income.

The SA system is also now used to:

  • Make student loan repayments for those who aren’t in full-time employment.
  • Clawback Child Benefit paid to parents who earn over £50K per annum.

In our UK HMRC Self Assessment guide, we’ll research what HMRC SA is and who does a Self Assessment tax return. We’ll take a detailed look into how to complete a tax return for contractors. We’ll consider what to report on your contractor tax form to HMRC, the tax return deadline (UK) and how to pay your Self Assessment bill. Besides explaining how to register and file for Self Assessment, there’s plenty of good Self Assessment tax advice regarding SA reporting to HMRC.

Initial thoughts 

SA tax return guide -who must file an SA tax return each year?

As part of this SA tax return guide for UK contracting professionals, let’s now consider who has to do a Self Assessment tax return. Most importantly, HMRC advice is you must complete an SA tax return if you meet any of the following criteria:

  • HMRC has issued a notice to complete a Self Assessment tax return;
  • Self-employed income exceeds £1,000;
  • Gross income from savings and investments exceeds £10,000;
  • Income is received from a trust or estate;
  • Employment expenses of more than £2,500 are claimed;
  • The taxpayer is subject to the High Income Child Benefit (HICB) charge.
  • The taxpayer has realised capital gains over the Capital Gains Tax annual exempt amount, or the proceeds of disposals exceed £50,000.

As mentioned above, HMRC will issue a notice to complete a return for most people. However, you must register for SA if you have untaxed income not covered by your personal, dividend, or savings allowances. This includes dividends, rental profits, and foreign income.

As an individual, you may have reliefs on which you can claim tax back. Tax reliefs include personal pension payments. In addition, they include donations under Gift Aid and investments under Venture Capital Schemes (EIS, SEIS, and SITR). In this case, you should file an SA return to claim your tax relief.

An online tool is available from HMRC to help determine whether a self-assessment tax return needs to be submitted.

SA errors

When you complete your SA tax return form, ensure you don’t make SA errors. In addition, as part of your contractor SA tax return, you may need to know how to make a contractor payment on account (POA).

What is an SA tax return form?

Most limited company contractors don’t have a complex HMRC tax return. Therefore, what’s a contractor SA tax return? Furthermore, how do you complete your Self Assessment (HMRC)? Most professionals with their own contractor limited company and small business owners have a salary, dividends, and perhaps some personal bank interest. Your contractor tax filing isn’t too complex when this is the scenario. However, your contractor tax return will take longer if you have other income. Indeed, additional income could include rental profits, foreign income, investment income, Capital Gains Tax transactions, etc. This SA overview page from HMRC is helpful for an overall view of the SA system’s work.

If you have a good contractor accountant, they’ll usually prepare your contractor SA tax return for you and provide any relevant tax return advice. If they do this, they should also submit your return to HM Revenue & Customs (HMRC) on your behalf. However, you must include all your taxable income and any reliefs on your contractor tax return.

To sum up, it’s good tax return advice in respect of your contractor SA return, and it is up to you to:

  • Ensure all other details on your tax return are correct; and
  • You submit your return accurately to HMRC.

Other initial thoughts

How do you register for a Self Assessment tax return?

In this HMRC tax return guide, it’s key to be aware you must register for SA with HMRC before you complete your contractor tax return. If you’re a director of your own company, your accountant will usually handle this process. What’s more, they’ll provide advice on your tax return when necessary. Once you register, you’ll receive a Unique Taxpayer Reference (UTR). The reference is two sets of five digits. Please make sure you keep this in a safe place.

In the future, HMRC will send you a notice to complete an HMRC tax return through the post each year. You usually receive this in April or May, just after the tax year-end on 5 April. If you don’t receive this notice but are under the SA system or should be under the SA system, you must still complete your contractor Self Assessment UK tax return.

Register online to file your HMRC SA tax return form

As a UK contractor, you must register for SA with HMRC once you are aware you should file a HMRC SA tax return form. We now highlight that, as part of this Self Assessment tax guide, most taxpayers file their SA tax returns online via the HMRC website. However, due to certain complexities, most business owners and contractors pay their accountants to prepare and file their online tax returns. Therefore, to complete SA, you must register for an online Personal Tax (Self Assessment) account with HMRC. When registering, you must provide your email address and choose a password.

HMRC sends you an activation code through the post as part of this process. This code goes to your home address and typically arrives within seven working days. You must activate your account online with HMRC when you receive this. After doing this, you can use your HMRC SA login to access your online account with them and file your return online.

A paper tax return can also be completed and posted to HMRC. However, as mentioned earlier, most people file their tax returns online nowadays.

Tax return (contractor) -complete UK contractor Self Assessment tax return online 

How do you complete Self Assessment tax return (UK)? 

Let’s now consider how to do Self Assessment tax (UK) and how to file your return with HMRC. As part of this HMRC Self Assessment tax return guide, it’s important to be aware that the more sources of income you have, the more complicated your personal financial tax affairs are.

When you complete your SA tax return, there are various sections to fill in:

  • Your gross salary from your primary employment. This section requires your gross salary and tax as shown on form P60. If you have a business and pay yourself a salary, your accountant should have sent form P60 to you. Also, you’ll require a copy of the P11D form from your employer if you were provided with any Benefits in Kind. If you have a company and receive benefits, your accountant should have sent you a copy of form P11D in June or July.
  • The pay and tax details you receive from a second job or the details of any income from previous employment. Basically, these details are shown on the end-of-year P60 form, P45 form or the final payslip for that employment. In addition, if this is the first year you’re due to complete Self Assessment (HMRC), you’ll include your salary and tax on your P45 form from your previous employer. You’ll have received a P45 form shortly after leaving your former employer.
  • Redundancy lump payment from a former employer.

Which further items may need reporting on the HMRC SA tax return? 

  • You may ask if Universal Credit is taxable on Self Assessment, and the answer is yes. Indeed, you must report any amounts you receive under Employed Income Support and Universal Credit on your Self Assessment tax return. 
  • The details of any income (and expenses) you receive from Self-Employment.
  • The details of income and expenses from any partnerships. 
  • Any income from investments. This will include pensions.
  • Dividend income. This includes dividends from your company and any other dividends you may have received.
  • If you’re a landlord, the details for any property you rent out, including the rental income and expenses.
  • Any interest you receive on your bank or building society accounts. This interest doesn’t include any interest which you receive on ISAs.
  • Any foreign income.
  • Details of any Capital Gains transactions, including any claims for Entrepreneur’s Relief on a gain or loss on selling a second home, a business or other chargeable assets.
  • Child Benefit income -part or all of this must be paid back if you or your partner earned over £50,000.
  • Any payments to charities under Gift Aid -if you claim tax relief. Claiming for these only affects your tax bill if your overall gross income is over £50,270.
  • Any payments you make personally to personal pension schemes. In addition, any employee pension payments via your salary where tax relief isn’t given at source. In both cases, you can claim additional tax relief.

SA tax return guide -should you include supplementary pages with your tax return?

As part of this UK SA tax return guide, some specific income or relief items are reported on supplementary pages attached to your HMRC tax return. Indeed, these are reported separately as extra details are necessary (the tax return itself is limited to the number of boxes for each type of income). Therefore, these include:

  • Additional information (SA101).
  • Employment (SA102).
  • Self-employment (SA103S or SA103F).
  • Partnership (SA104S or SA104F).
  • UK property (SA105).
  • Foreign income or gains (SA106).
  • Trusts etc. (SA107).
  • Capital gains (SA108).

Tax rates

There are different tax rates in the UK depending on your income level. Indeed, in 2024/25, these are 20% up to £50,270, 40% between £50,271 and £150,000, and 45% above £125,140.

Submit your contractor SA tax return to HMRC 

File your return online

When you complete your SA return via the HMRC website using your own HMRC SA login, it’ll determine what tax you’re paying or what refund they owe you. Once you’ve filed, you can take a copy of your Self Assessment tax return for your records. Regarding the HMRC Self Assessment processing time, once you’ve filed this, HMRC will update their systems within a couple of working days.

Where to post Self Assessment tax return?

Alternatively, if you want to submit a paper return, you can post it to:

Self Assessment

HM Revenue and Customs

BX9 1AS

If you have an accountant, they’ll provide advice regarding your tax return and answer any questions you have. They’ll also usually provide backup schedules for your contractor Self Assessment (HMRC) tax return and a copy of your final SA return. Moreover, they’ll submit the tax return to HMRC on your behalf.

HMRC Short tax return

In some cases, you can complete a short tax return. HMRC’s advice is that the SA200 Short Tax Return is a simpler version of the SA100 Main Tax Return. However, it should only be used if HMRC asks you to do this. 

Other thoughts on filing UK contractor Self Assessment 

What are the filing & payment deadlines?

When you file your SA return online, the UK HMRC Self Assessment tax return deadline is 31 January, after the end of the tax year. This is also the date by which you must pay your tax bill. The annual tax bill is the balancing payment, as this is the amount required to pay the balance of tax you owe for the previous tax year.

The tax return deadline (UK) and tax payment deadline are 31 January 2025 for the tax year ending 5 April 2024. Likewise, the deadline for the tax year ending 5 April 2023 was 31 January 2024.

You can still fill in a paper return (SA100) by sending this through the post to HMRC. In this case, the deadline to complete and file your paper tax return is 31st October 2024. In addition, this is the date you should have paid your tax bill.

If you submit tax returns or revised tax returns for past tax years, in some cases, you may have to file this on a paper tax return and send it through the post to HMRC, as the online option isn’t available. 

Payments on account (POA)

As part of this tax Self Assessment guide, it’s key to note under the personal tax system, you may have to make `Payments on account’ by 31 January and 31 July each year. Furthermore, contractor POA are payments for the following year’s contractor Self Assessment UK tax bill. However, you won’t have to make payments on account if:

  • You’ve already paid over 80% of your tax bill for the year. For example, you pay your tax through your tax code on your salary.
  • If the first option doesn’t apply, you won’t have to make payments on account if your SA tax bill is less than £1,000.

Therefore, if you don’t satisfy the above two conditions, you’ll be required to make payments on account of the following year’s tax bill.

UK contractor Self Assessment -pay your SA tax bill on time   

As part of this guide on your tax return, please remember SA is one of your limited company contractor taxes. However, this is a personal tax rather than a company tax.

When paying your tax bill, you should ensure HMRC receives any liability by the payment deadline. When you pay, the reference you quote is your UTR code with a capital `K’ at the end.

If you’re due a tax refund, HMRC will make the Self Assessment tax return repayment around two to three weeks after you submit your tax return to them. If you file your return after 30 December, HMRC will net this off your first payment on account for the following tax year if you’re due to make POA.

If you have a liability of £3,000 or less, you can ask HMRC to collect the tax you owe by adjusting your tax code. If you want to do this, the deadline for filing your tax return is 30 December. Please talk to your accountant if it’s something you’d like to do. 

As part of the tax return advice in this guide, the options available for paying your Self Assessment tax bill are:

  • Direct debit.
  • Approve a payment through your online bank account.
  • Make an online or telephone bank transfer (this is the most popular).
  • By debit or corporate credit card online.
  • At your bank or building society.
  • By cheque through the post.
  • Pay weekly or monthly.
  • Through your tax code.

There is a fee if you pay by corporate credit or debit card, and the fee isn’t refundable. However, there’s no fee if you pay by personal debit card. Furthermore, you can no longer pay with a personal credit card.

Which further areas are there to consider? 

Filing penalties 

There are various filing penalties if you miss the filing date or are late paying your SA tax. If you miss the 31 October or 31 January deadlines, HMRC automatically charges you a £100 penalty. Moreover, this penalty is chargeable regardless of why your return was late. Furthermore, the £100 penalty applies if you’re up to three months late after the SA tax return deadline.

If you file after 28 February, your actual tax bill will have a 5% penalty. Further to the above, regarding the first deadline, you have 90 days to file your tax return, after which it’ll cost you £10 a day in fines (up to 90 days -£900). In addition, there are further penalties every six months (£300) and twelve months (a further £300) if you’re even later. Therefore, our tax return advice is to ensure you file your return on time each year.

Further penalties exist if you do not pay your tax bills to HMRC on time. In addition, you pay interest when you pay your tax late. To sum up, this is a good guide from Ross Martin that explains clearly how the penalties work for SA.

Are you unable to pay your contractor Self Assessment on time? 

If you struggle to pay your personal tax bill on time, you should consider contacting HMRC and setting up a Time To Pay arrangement. Before speaking with them, you must think about a realistic plan. Generally, they’ll agree to a payment plan over 12 months; however, when this is implemented, you must ensure you stick to the plan to avoid further issues later.

If you want to speak to HMRC to set up a plan, you can use the Self Assessment payment helpline. The number is 0300 200 3822, and it’s open Monday through Friday between 8 a.m. and 4 p.m.

Contact HMRC Self Assessment

HMRC -de-register Self Assessment -how do you de-register for Self Assessment tax return?

Let’s now consider how to deregister from Self Assessment. If you’ve been registered under the Self Assessment tax system, there’ll come a time when you must no longer be in the system. In general, you’ll no longer be within SA if all your income is taxed at source (salaries) and you have no untaxed income (dividends, rental profits, etc.).

If you no longer need to be in SA, you’ll want to know how to unregister for Self Assessment. The process is to contact HMRC Self Assessment and advise them of this. After a few questions, they’ll deregister you from SA. A simple phone call to 0300 200 3310 can resolve this. They’re open Monday through Friday between 8am and 6pm. When you call, please give them your SA tax reference or National Insurance number.

Contact HMRC with general SA enquiries 

As with the above section, you can contact HMRC for general tax return advice and general enquiries on SA by calling 0300 200 3310. They’re open Monday through Friday between 8am and 6pm. Once again, please give them your SA tax reference or National Insurance number when you call. 

Final thoughts 

This SA tax return guide covers most aspects and should give insight into how the HMRC SA tax return form system works. There is a lot of helpful UK HMRC Self Assessment tax return advice, and if you’re required to send a tax return to HMRC, you must do so before the deadline. You must file your contractor Self-assessment accounting once per year, and it’s even better if you can file your SA return soon after the tax year-end. This way, you’ll know you’re up to date with your SA filing requirements and that the task won’t reappear until the following year.

Another good piece of advice is to open an online SA account with HMRC. Then, you can log in with your HMRC SA login and monitor your tax liabilities and other SA areas.

As you can see, SA can be quite a complex area. Filing SA is part of your limited company contractor taxes, and it’s relatively easy to get lost if you’re unsure. Hopefully, the tax return advice in this guide has given you a good insight into SA. Finally, if you have any questions or issues about SA, you should check these out with your accountant.

Link to Contractor Advice UK group on

LinkedIn    https://www.linkedin.com/groups/4660081/

Published On: April 6th, 2024 / Categories: First timer guide, Guides, Self-Assessment, Tax Guides /

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