Accounting, even at basic levels can be confusing. It’s relatively easy to generate your own income, there are multiple ways of doing so. When you get started, one aspect that is often overlooked is how do I report my earnings, and who to?
Over the years we’ve come to appreciate the special relationship needed between accountant and client so that we can add our expertise for the client’s business to flourish. That’s why we’ve created our series of articles: Accounting Made Ezy. We hope they help.
Self-assessment is the system that HM Revenue & Customs use to collect Income Tax from certain individuals. Those who earn money that isn’t automatically reported to HMRC via PAYE, must declare said income via an annual self-assessment tax return. In this article we will be exploring what a self-assessment is, who needs to process one and how Ezyco Accounts can help.
The HRMC definition –
“Self-assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax. Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return.”
The self-assessment tax return declares how much an individual has earned, from what sources, over the course of the tax year. If you are obliged to submit a self-assessment it must be prepared, sent to HMRC and any owed tax must be paid, and cleared in to HMRC’s bank account by midnight on 31st January every year.
Most people in the United Kingdom are employed, thus, they pay their owed automatically tax via PAYE (Pay As You Earn) and are not required to file a self-assessment. If you do have a secondary source of income, or your income stream is outside of the PAYE system then you will need to process a return – here are a few examples:
The answer is, that it is the responsibility of the individual to know if they need to file self-assessment. HMRC won’t necessarily have all of the relevant information in order to make this determination on your behalf. If you fall in to one of the categories listed above, the team at Ezyco will be able to help you determine if you do need to file self-assessment.
Here at Ezyco Accounts, we provide services such as self-assessment registration and filing, we can manage your accounts, VAT registration and returns, bookkeeping, invoicing and managing your expenses. We work hard to stand out from the crowd! Our goal is to make your accounts preparation as smooth and straightforward as possible. Your dedicated consultant will help you to stay on top of admin and reporting and ensure you’re able to reach your full potential within your chosen venture.