Expert help from HMRC about your tax return

SME Magazine asked the experts at HMRC all the questions small and new businesses need to know about Self Assessment so you don’t have to…

Each year more than 12 million taxpayers, including self-employed workers and small businesses, are legally required to declare their earnings and pay any tax owed by completing a Self Assessment tax return. Collectively, Self Assessment customers pay around £33 billion in tax each year that helps fund vital public services. However, many small businesses are still unaware of the deadline for filing their returns. For small – and especially new – businesses the whole process may well seem bewildering, but HMRC is here to help you get it right.

Do I need to complete a Self Assessment return?

Maybe! If you started your business between 6 April 2021 and 5 April 2022 and earned more than £1000, or if you’re a new partner in a business, you will need to fill in a Self Assessment tax return for the 2021 to 2022 tax year. You can check if you need to complete a tax return by using the free online tool on GOV.UK.

What is the deadline?

The deadline for online filing is 31 January 2023. The majority of customers choose to complete their tax returns online as it’s the simplest and quickest way to do it.

What do new businesses need to do before they start to think about Self Assessment?

The first thing customers need to do is register to get a Unique Taxpayer Reference (UTR). Once you have one, you can access all the guidance you need to support you through the Self Assessment process, help you understand your obligations such as record keeping, filing and payment deadlines as well as details about payment options. Register for Self Assessment here.

To make it simpler, you can get your UTR via the app now as well as other things you’ll need including employment history. You can download it here

Why are you urging businesses to get started early?

We’re urging businesses to get started, complete and file their tax return early so they can budget for the tax owed rather than leave it until the last minute. If you do it online, you can start it now and go back to it as many times as you need to before submitting it. Completing your tax return early doesn’t mean you have to pay your tax any earlier – you still have until the deadline on 31 January 2023 to pay your tax.

More than 66,000 customers chose to get ahead of the game this year and filed their tax return on 6 April 2022, the first day they were able to do so. Visit GOV.UK now to get started, familiarise yourself with the process, understand your obligations so you’re ready to start.

What documents do businesses need?

You’ll need details of your income, earnings and other financial records. Financial records also include details of any grants or payments received during the 2021 to 2022 tax year through the Coronavirus support schemes, for example, the Self-Employment Income Support Scheme. Detailed information on what documents are needed for Self Assessment are available on GOV.UK. Self-employed customers must also register for Class 2 National Insurance Contributions.

What guidance and help is available to new businesses?

Lots! There’s a whole raft of guidance and advice online so we would urge businesses to register, if you haven’t already, to start accessing the help and support you need to file your Self Assessment return. There’s also a series of videos on YouTube and HMRC also has an updated Self Assessment guide to help customers complete their tax return.

It sounds straight forward enough – is it?

Yes, if you’re organised, register early, read the guidance and get the documentation you need. Last year more than 4.5 million customers completed their tax returns themselves online through their Personal Tax Account. HMRC’s online filing service is free, quick and simple and available 24 hours a day with all your tax information saved in one digital service.

Small businesses may well be worried about paying their first tax bill – what would you say to them?

This is another reason to file early so you know what you owe, can budget, which is essential for a new or small business, and you can choose to leave payment until 31 January. For those who are unable to pay their tax bill in full, make sure you access the support and advice that’s available to you. We may be able to help by arranging an affordable payment plan. Visit GOV.UK and search ‘time to pay’.

Anyone worried about paying their tax bill can access a full list of payment options and eligibility criteria on GOV.UK.

What happens next?

Once you have filed and submitted your tax return, it can take up to 72 hours before you can go to your online account and see confirmation that your tax return has been processed; view your account to see any changes to your tax position or make any changes to your tax return.

How do businesses pay?

Payment is simple and can be made by downloading the HMRC App, while a full list of payment options for Self Assessment is available on GOV.UK.

What else do businesses need to think about?

All Self Assessment customers, especially new ones, need to be aware of the risk of scams as criminals use Self Assessment as an opportunity to commit fraud. Customers must never share their HMRC login details as criminals use them to steal or make a fraudulent claim.Customers should check HMRC’s advice about scams on GOV.UK.