Registering for tax self assessment, when would I pay?
Discussion
Okay, wondering if Anyone can help.
I Am in full time PAYE employment. If I was to start a secondary "part time" job on a self employed basis, and registered with HMRC on the same day which for arguments sake is the1st of June 2013, when would I have to submit my first assessment and when would I have to pay the HMRC what I owed in tax?
Let's assume that what I earn from my self employed activities could be anywhere from 0 to 3k a month with no forward visibility.
Thanks in advance.
I Am in full time PAYE employment. If I was to start a secondary "part time" job on a self employed basis, and registered with HMRC on the same day which for arguments sake is the1st of June 2013, when would I have to submit my first assessment and when would I have to pay the HMRC what I owed in tax?
Let's assume that what I earn from my self employed activities could be anywhere from 0 to 3k a month with no forward visibility.
Thanks in advance.
If your source of self employed income starts in June 2013, this means the first tax year for which you will be required to submit a Self Assessment tax return is tax year 2013/14.
You are required to notify HMRC that a source of Self Employment has started within three months of the start of the Self Employment.
Sometime after 5 April 2014, HMRC will issue to you a Notice to Make a Self Assessment Tax Return for 2013/14.
You have a choice. You can complete a paper return or you can complete the return on-line.
If you want to complete a paper return, you need to ask HMRC specifically to send a blank paper return to you. They do not send out blank paper returns automatically anymore.
Also, if you want to submit a paper return, the return will have to be submitted to HMRC on or before 31 October 2014. If filed after that date, you will pick up an automatic penalty of (initially) £100.
If you want to file electronically, you need to contact HMRC so that you can get a filing reference and a PIN type code so that you can access the HMRC website. You need to do this as far in advance of filing the return as you can.
If you are intending to file electronically, the statutory deadline date for filing is 31 January 2015. If filed after that date, you will get the (initial) £100 penalty. The penalties go up if the return misses subsequent deadlines and can reach as high as £1,800.
If on completion of the return you calculate that you have a Self Assessment tax liability for 2013/14, this will be payable in full by 31 January 2015.
Depending on a number of factors, you might also be asked to make Payments on Account in respect of the following tax year (2014/15). These are initially set at the same level as the 2013/14 tax liability.
The first 2014/15 Payment on Account is payable on 31 January 2015 and the second on 31 July 2015.
As you can see, the payment on 31 January 2015 could consist of two elements - the full payment for 2013/14 and the 1st Payment on Account for 2014/15 - so you might need to budget for this.
The earlier you complete the 2013/14 Self Assessment tax return, the sooner you can plan and budget for any tax payments due on 321 January 2015 and 31 July 2015.
The Self Assessment "tax bill" is actually a combination of Income Tax and Class 4 National Insurance - so it's not just Income Tax.
Don't also forget about the possibility that you might also need to start making regular Class 2 (Self Employed) National Insurance contributions. These are paid on a ""as you go" basis and are usually paid monthly by direct debit or quarterly by specific payments (usually cheque).
You start paying Class 2 NI if your expected profits from self employment will exceed £5,725.
Simple, innit
You are required to notify HMRC that a source of Self Employment has started within three months of the start of the Self Employment.
Sometime after 5 April 2014, HMRC will issue to you a Notice to Make a Self Assessment Tax Return for 2013/14.
You have a choice. You can complete a paper return or you can complete the return on-line.
If you want to complete a paper return, you need to ask HMRC specifically to send a blank paper return to you. They do not send out blank paper returns automatically anymore.
Also, if you want to submit a paper return, the return will have to be submitted to HMRC on or before 31 October 2014. If filed after that date, you will pick up an automatic penalty of (initially) £100.
If you want to file electronically, you need to contact HMRC so that you can get a filing reference and a PIN type code so that you can access the HMRC website. You need to do this as far in advance of filing the return as you can.
If you are intending to file electronically, the statutory deadline date for filing is 31 January 2015. If filed after that date, you will get the (initial) £100 penalty. The penalties go up if the return misses subsequent deadlines and can reach as high as £1,800.
If on completion of the return you calculate that you have a Self Assessment tax liability for 2013/14, this will be payable in full by 31 January 2015.
Depending on a number of factors, you might also be asked to make Payments on Account in respect of the following tax year (2014/15). These are initially set at the same level as the 2013/14 tax liability.
The first 2014/15 Payment on Account is payable on 31 January 2015 and the second on 31 July 2015.
As you can see, the payment on 31 January 2015 could consist of two elements - the full payment for 2013/14 and the 1st Payment on Account for 2014/15 - so you might need to budget for this.
The earlier you complete the 2013/14 Self Assessment tax return, the sooner you can plan and budget for any tax payments due on 321 January 2015 and 31 July 2015.
The Self Assessment "tax bill" is actually a combination of Income Tax and Class 4 National Insurance - so it's not just Income Tax.
Don't also forget about the possibility that you might also need to start making regular Class 2 (Self Employed) National Insurance contributions. These are paid on a ""as you go" basis and are usually paid monthly by direct debit or quarterly by specific payments (usually cheque).
You start paying Class 2 NI if your expected profits from self employment will exceed £5,725.
Simple, innit
Eric Mc said:
If you want to file electronically, you need to contact HMRC so that you can get a filing reference and a PIN type code so that you can access the HMRC website. You need to do this as far in advance of filing the return as you can.
Can I recommend you do this first as otherwise, if you are like me, you'll forget, then end up doing it on 29th Jan 2014 and sweating a lot 
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