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Self Assessments - What do I need to do?

Updated: Mar 27, 2023

Is it that time of year again when you need to either make payments to HMRC for your Payment on Account, complete your Base Assessment or submit your ITSA.


Or is it perhaps:


You have done it previously but would like to make sure everything has been calculated, completed & submitted correctly and on time?

Unsure what is needed and where to start?


Want to make sure you are fully compliant and efficient?


Incurred penalties and would like to avoid the same reoccurrence?







Auxilium can help you on all parts of your tax returns, from Self Assessments to Corporation Tax and Statutory Submissions.


None of these are the best position to find yourself in, and there are solutions to prevent the stress and anxiety that may build up in managing all these submissions and legal compliance.


Why put yourself through the sleepless nights, anxiety or even penalty fee's that can impact your personal life and business operations.


By signing up to Auxilium Finance book keeping and accountancy subscription we can help eliminate all that stress. We cover both Middlesbrough and the local area, as well as the whole of the UK, supporting businesses of all sizes.


If you don't have your own software that isn't a problem. As an accredited practitioner and partner with FreeAgent we can provide you with your own cloud based software that is available to use where ever you are in the world; even on the go with your mobile app.


FreeAgent gives you the ability to manage your bank accounts, cashflow, tax deadlines, invoicing, bills and cash management all in one app. We can even provide this to you for free if you have a business account with Mettle, Natwest, RBS, RBU.



First Submissions


HMRC will assess you for tax purposes in your basis period, resulting in a tax requirement on all profits relating to the accounting year that ends within the tax year being assessed.


For your first return, your basis period is from when you started trading up too the 5th April. Your second return will be for your full accounting year from when you started.


Example: Trading commenced 1st February 2021

  • First Period will be 1st Feb 2021 - 5th April 2021.

  • Second Period will be 1st Feb 2021 - 31st Jan 2022.

Basis periods will cease from tax year 2024/25 (6th April 2024), resulting in your profits and tax being calculated from 6th April to 5th April the following year.

From the 6th April 2023 for the 2023/24 tax year, it will be treated as a transitional year to bring everything in line.



Payment on Account


HMRC calculates your tax liability based on your self-assessment. This includes tax you owe, Class 2 & Class 4 National Insurance contributions and any student loan repayments that would be owed.


If HMRC calculate your tax liability to be over £1,000 then they will require you to pay something via a POA "Payment On Account", which is a form of advanced payment for your future tax bill.


HMRC assume that your future earnings, will mirror that of the period you have submitted and will therefore require you to pay the same Tax and NIC due in advance over 2 instalments. (This excludes Student Loan repayments)


50% will be due by the 31st January and the remaining 50% by 31st July.



How to Calculate your Profit


First you must calculate your profit in order to submit your Self Assessment. This is done by subtracting expenses from revenue.


example:

(a) Sales £21,000

(b) less Sales Returned (£1,000)

(1) Total Revenue £20,000


(c) Cost of Goods Sold £5,000

(d) Software £100

(e) Accountancy £1,000

(f) Consultancy £500

(g) Recruitment Costs £500

(h) Travel & Subsistence £100

(i) Salaries £5,000

(j) Depreciation £800 (£2,400 pc over 3 years £800 pa)

(2) less Total Business Expenses (£13,000) (Allowable Expenses)


(k) less Depreciation (£800)

(l) add Capital Expenditure (AIA) £2,400

(m) First Year Allowance (FYA) £0

(n) Write Down Allowance (WDA) £0

(3) less Total Capital Allowances (£1,600)


(4) Total Taxable Profit £5,400



How to Register for Self Assessment


It is worth noting that if you will require self assessment, the deadline for registering is the 5th October


  1. Go to www.gov.uk

  2. "Money & Tax"

  3. "Self Assessment"

  4. "Register for Self Assessment"

  5. "Register if You're Self Employed" OR "Self Employed"

  6. "Register Online"

  7. Enter your email address (keep a note of this)

  8. Answer the questions specified (keep a note of these)

  9. Note down the log in details created, passwords, security questions etc

  10. A UTR number (Unique Tax Reference) will be posted out to you.

  11. When the UTR is received, enter the activation code needed.

  12. Your account will be fully activated and can now submit a self assessment



How to complete your Self Assessment


Watch out for your taxable profit figure before / after you apply your Capital Allowances. It may be worthwhile to only claim part AIA and the rest as WDA if your taxable profit falls below the tax-free allowance.

Splitting it out utilises the full tax-free allowance provided to your business and helps maintain future profits.

This is only allowed on an accruals basis, so do check with your accountant.


  1. Go to www.gov.uk

  2. Fill in the details on your return as you go along

  3. Enter your turnover (total sales) as a single total eg. £20,000

  4. Enter your total allowable expenses eg £13,000

  5. Complete all the relevant boxes for capital allowances eg £1,600

  6. Enter any business losses you wish to reclaim

  7. Complete all of the form, save & submit



Keeping up to date

If you are unsure on where you stand or what service you require, contact us for a free conversation to see how we can best support or advise you.


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