How to file tax return uk online
SELF EMPLOYED UK - How to complete a SELF-ASSESSMENT tax return - A simple guide.
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today i'm going to do a walk through of
the 2019-2000
self-assessment tax return in the uk for
self-employed individuals
that tends to include builders plumbers
electricians
trades people in general plus small
business owners
the deadline for filing of this return
is going to be the 31st of january 2021
so i hope you're all watching before
then otherwise most likely you're going
to be incurring a penalty
having said that the layout doesn't tend
to change much year by year so you
should be able to use this video for
future filings as well
in a moment i'm going to share my screen
with you and we'll walk through the
process step by step
before i do that though i just need to
point out a few assumptions
i'm going to be making throughout the
video first of all
this is not going to be financial advice
i'm just going to run through a
hypothetical situation
if at any point you are unsure what
you're doing make sure you seek
professional advice
having said that in the uk it's called a
self-assessment
it's not an accountant's assessment so
the idea is that for the majority of
people with simple tax affairs
they should be able to do this on their
own when i complete this tax return the
first assumption that i'm gonna make is
that you have been trading as a
self-employed individual
at some point between the dates 6th of
april 2019
and 5th of april 2020. the second
assumption i'm making is that you have a
very basic setup
you have income from your customers and
then you have some expenses that go with
them
fuel tools materials and these types of
things
thirdly you don't have any other sources
of income to declare
in the 2019-2020 tax year
fourthly you're going to be using the
cash basis
now that's a little bit of an accounting
term but basically it just means that
we're going to record
the income and the expenses on the date
that they actually leave your bank
account
and finally you already have a
government gateway id
now if you don't have a government
gateway id maybe this is your first year
of trading
pause the video now google government
gateway id
fill out the form and they will send you
one out in the post
now i'm going to share my screen with
you and we can get started
start by getting logged into your
government gateway and then follow the
blue links to file a return for the 1920
tax year
the return i submit today took around 15
minutes
i'm going to play that recording but i'm
going to speed it up a little bit
and then i'll talk over the top giving
you an idea of what you need to do
if you need more detail just slow down
and follow the steps
i'm going through i'm going to brush
over my personal details here
and now we can start the return this
first section is just tailoring your
return so you'll just need to tick yes
for any questions that do apply to you
and it will generate the appropriate
sections
the first question were you an employee
or director
no for this one in our example it's
going to be the second question that is
for the self-employed individuals
and it's only if you had to turn over
more than 1 000
pound if you had less than that then
technically you don't need to
declare it because it's just a hobby you
can also tell them how many
self-employed businesses you had
if you did happen to have more than one
you let them know there
and you'll need to enter a name for your
self-employment could be
your own name could be a genuine
business name plumber electrician
whatever you want to put
were you in a partnership with someone
else no in our example
or did you receive any uk land and
property income
rental properties that kind of thing
again we're going to say no to
everything else
foreign income no capital gains selling
shares that kind of thing no
and then work on to the next page
page two still trying to find out what
type of income you had so the top
question
did you receive any interest if we're
talking about five
ten pence don't worry about it interest
rates are so low at the moment you're
probably not going to need to declare
any dividend income the second question
no receive any pension income no
or child benefit you would click in this
section but for example again
it's a no did you receive
any other types of uk income lump sums
that kind of thing no in our example
did you make any income tax losses no
so we're still tailoring the return at
this point
pension savings tax charges if maybe
you've paid too much into your pension
as there is a limit the third section
still tailoring your return here but
they're asking questions
that would potentially get you some tax
relief did you contribute to a pension
a private pension scheme did you give
anything to charity
can you claim the married couple's
allowance if you're born before 1935 so
just answer any of these
that might apply to you none of them
will in our example
you can also transfer 10 of your
personal allowance to your spouse
if either of you earn less than 12 500
this can be useful to save on your tax
bill any other tax reliefs that you
might want to claim in our example it's
going to be no to all of these
did you receive any tax refunded by job
center plus no did you have a tax
advisor you're completing your own
return
so in this case no have you used any
avoidance schemes
no disguise remuneration is similar to
tax avoidance schemes
so no and are you acting on behalf of
someone else no and continue
now that you've actually tailored your
return you'll see that it's generated
the right sections that you'll need to
complete below
so you can actually work through start
from the top one enter self-employment
details and that will take you through
to actually completing your return
now under this self-employment section
we're going to need to enter
income and expenses for our
self-employed business
they first ask you if you have turnover
more than 85 000
if you do tick the box but they're going
to ask you to register for vat
because it will become compulsory and
then below that it's another tick box
exercise
but you only tick boxes that apply to
you
and 99.9 percent of the time none of
them will apply so
most people will be able to scroll
straight down to the bottom because
they're not barristers
they're not operating abroad they're not
claiming overlap relief
and you'll find one box that says none
of these apply
then you can save and continue
on this page we'll need to give a little
bit more information about the business
a few words in the description will be
fine
you can give a postcode as well if you
like but it is optional
so i tend to not complete these boxes if
you've changed any details about the
business you can let them know here but
in this example no
and if you started the business in this
taxi you'll have to give them the date
there
you also need to tick to say that you
haven't ceased trading in this tax year
and then continue
now with the date your books are made up
to technically you can choose any date
but it can get a little bit complicated
if you choose a random date in the
middle of the year
most people tend to go with either the
31st of march
2020 or the 5th of april 2020.
we're doing the cash basis which means
we'll include all transactions
on the bank statements exactly up until
that date
you also have another question below
about using the cash basis so just
confirm
that is the way we're going to do things
and then you can continue on to the next
screen
now we need to actually enter some
figures for the self-employed business
but first of all you'll need to tick the
top box to confirm that the information
you're giving
is accurate and honest the turnover
figure the top
one is where you're going to put all
your income for the year so probably
best to keep some records for this
and total everything up in a spreadsheet
as my example i'm using 50 000 as the
income
all of that income goes in the top box
and then for the majority of people the
second two boxes won't apply
so they can just be left blank and then
below this you have the option to enter
your expenses as either a single total
or as a detailed breakdown it's
completely up to you
but for ease i'm going to enter all the
allowable expenses
as a single total and 20 000 is going to
be my example
which should leave us with a net profit
of
30 000.
this next section is for capital
allowances which we didn't have in our
example
but this would be for anyone who has
been buying plant and machinery for
their business maybe a new van that kind
of thing
they may need to detail it here but for
my example
i'm just going to skip straight past
this section because we didn't have
these expenses
if you take any goods from your business
for your own personal use
maybe you're a plumber and you took one
bathroom set to use at home
technically you should declare that here
so it can be added back and then they'll
tax you on the amount
in our example we didn't have this so
i'm gonna skip forward to the next
section
if your self-employment has made a loss
in this tax year you can enter in the
top box
so they offset it against other income
in the same year you can also carry it
back in the middle box or carry it
forward
in the bottom box we've made a profit
this year of 30 000 so i'm going to skip
forward
if you do work in the construction
industry and maybe you're working on
site
quite often they'll deduct 20 or 30
percent from your pay before they pay
you
if you've had that done you need to
enter it here so you don't end up being
taxed on it twice
and if for any reason you have received
notification to say that you are exempt
from playing
class 4 national insurance you would let
them know here
but that is extremely unlikely so are we
ticking no to this box for our example
you can click on the top to find out
more information about who would be
exempt
but for the example no
you're also given a bit of white space
here if you want to provide any extra
information to hmrc you can do
and that brings us on to the summary of
our self-employment business
exactly what we inputted the 50 000
income
less 20 000 expenses gives us 30 000
profit you won't see anything mentioned
here about the
deduction for cis that comes later
and at the bottom if you want to add
more businesses maybe you have two or
three self-employments you do that here
this screen is just to let you know that
over a certain amount of profit you need
to pay class to national insurance of
three pound per week
anything less than that and it's up to
you whether you want to make the
contributions or not
in this example i'm going to say no to
making voluntary contributions
and then to complete the return you just
have a few tick box exercises confirming
that the amounts are correct
no overpaid p-a-y-e for all of these
you're just going to agree
zero is correct and then move forward
same again on the next question
zero is the correct figure yes and then
you can move forward
and for the third one you'll normally
need to enter a zero
into that box unless hmrc have sent you
correspondence to say otherwise
if any reason you would do a repayment
you can enter details here of who
receives that repayment in our case we
made a profit so it's not going to be
applicable
and move forward and when you have a tax
bill they always give you these two
options to have the amount collected via
paye
code the same for overcharges on child
benefit and these types of things
but i always just say no to these boxes
and in our example we will do as well
and move forward
you can make adjustments on this screen
but for the majority of people they're
going to be optional anyway and they
won't apply
so you can leave them blank and then
move forward to the next screen
does the return contain any provisional
figures no
you should be saying to this one they're
all final figures
and then again you have some white space
to give some extra information if you
really wanted to
you can also attach documents to your
return if it's going to help with the
filing
on this check your return screen just
have a scroll through and read that
everything
sounds correct that you've tailored your
return correctly and filled out the
right sections
check below to make sure you've entered
and completed all the different sections
as well
and finally we have a summary of our
actual tax bill
so you can see here on our
self-employment profits it's calculated
we owe four hundred and twenty three
pound twelve
pence below that you'll also see that
they want a payment on a count of one
thousand seven hundred and eleven pounds
given a total due of five thousand one
hundred and thirty four
sixty eight that needs to be paid by the
31st of january
scroll down and you'll see they want a
second payment on account by the 31st of
july
and that just means that by the time you
get to next year's tax return
they shouldn't assuming that the figures
are similar there shouldn't really be
much of a tax bill
if for any reason you think your
situation is going to be different next
year you can reduce your payments on
account here by selecting yes
you'll enter the amount that you want
the payments on account to be
and then give them a reason why so let's
say you weren't going to have any income
next year
then you'll just enter the detail in
these boxes to let them know
and then it will remove those extra
payments on account for you
before you submit the return you're
given a chance to save a copy or print a
copy
i always recommend keeping a copy stored
locally
declare that all the information you
have given is accurate to the best
of your knowledge by ticking the tick
box
and then that's it completed nice and
easy all you need to do is enter your
government gateway id again
and it will submit the return for you
that's everything for today guys let me
know in the comments if you have any
questions
and i'll see you all next time
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