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What is Self Assessment?

The official (full) name given to the return is ‘self assessment tax return’ or SATR for short; however, it is more commonly known as the personal tax return or self-assessment return. Throughout the articles you will see self assessment tax return referenced as SATR.

You will be required to complete a SATR if HMRC (HM Revenue and Customs) have sent you one. Even if you believe you should not complete one you must respond with a completed tax return.

If you are required to complete a SATR and HMRC have not sent you out a UTR (Unique Taxpayer Reference) then you will need to complete a SA1 form (register for self assessment request form) and send this to HMRC, this should be done no later than 5th October following the tax year-end. See ‘Who needs to File a Tax Return’ for more details.

When would I expect to receive an SATR Form?

The SATR is normally issued by HMRC on 6th April following the tax year end and is generally in the form of a notice to complete a return rather than a blank SATR itself, however if it is the first SATR you are completing then HMRC may send out a paper copy. Most advice would point you towards submitting the return electronically anyway as this gives you longer to complete the return and HMRC automatically calculates the taxes owed as part of the submission process. 

The tax year runs from 6th April to 5th April each year and this will be the period covered by the SATR, for example, the 2017/18 tax year runs from 6th April 2017 to 5th April 2018.

Important Dates

By filing your SATR online it will be due by the 31st January. On the flip side paper returns are due by 31st October. You only have longer than this if you received notification, telling you to send a tax return, after 31st October. In this case you will have three months from the date the notification was received.

Note:

Late returns incur an automatic penalty of £100 with further penalties being issued if the return is still outstanding 3 months after the normal due date. Additional daily penalties can also be issued for persistent non-compliance.

The payment of any taxes due for the year need to reach HMRC by 31st January following the tax year end. So, for example, any tax due for 2016/17 is due by 31st January 2018.

Payments on account

‘Payments on account’ are advance payments towards your tax bill (including class 4 National Insurance if you’re self-employed).

You have to make 2 payments on account every year unless:

  • your last Self Assessment tax bill was less than £1,000
  • you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings

Each payment is half your previous year’s tax bill. Payments are due by midnight on 31st January and 31st July.

If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31st January next year.

Sources of Income

When completing the SATR you will have to include all income received in that tax year and all taxes paid on this declared income, some of the most common sources of income are: 

  • Employment income (salary, benefits in kind etc.) as per the P60/P45 and P11d  
  • Dividends as per the dividend vouchers  
  • Bank interest as per a statement from your bank  
  • Pension income as per your P60 from the pension provider  
  • State benefits (Job seekers allowance etc.)  
  • Rental property income 

The above list is not absolute and any other sources of income would still normally need to be declared. When compiling your tax return you can use a self-assessment software provider to upload, calculate and store all relevant information.