How to register for self assessment

Do you have to register for self assessment?

There are a number of reasons why you may have to complete
a tax return for the first time –  if you:

• become a company director
• start to get income from land and property in the UK
• have taxable foreign income of more than £300
• sell shares, property or other assets liable to Capital Gains Tax
• have annual income of £100,000 or more
• get untaxed income which cannot be collected through your PAYE code.

The easiest way to register for Self Assessment is by doing it online.

  1. Visit the HMRC website and create a Government Gateway account.
  2. You will then receive your Unique Tax Payer Reference number (UTR).
  3. You will also receive an activation code to log into your account for the first time.
  4. You can then complete the registration form

If you’re filing online for the first time

Before you can sign in you must:

  • have your UTR – you’ll find your UTR on the registration letter HMRC sent you
  • enrol for the online service (you can do this when you create a Government Gateway account)
  • activate the service using the code you’ll be sent in the post

If you have filed tax returns before

If you’ve sent in tax returns before, you can use your existing Unique Taxpayer Reference number and log into your online account to file your returns. If you don’t have an account or UTR, you need to apply for them on the HMRC site. Again, you’re probably looking at a few weeks waiting time to get set up, so make sure you register early.

When you start working for yourself, registering for Self Assessment is the first part. You’ve got to do it as soon as possible, and you’ll get fined if you wait too long. The deadline for registration is the 5th of October in your business’s 2nd tax year. Don’t miss it!

 

Get in touch with In2Accounting for help and advice on getting yourself registered and preparing and submitting your self assessment tax return on time. 

02071128229 / team@www.in2finance.co.uk

 

Deadlines for Self Employed

The key dates that you must know about if you are a self-employed taxpayer are spread throughout the calendar year. If you put them in your diary now, you’re less likely to  miss them.

 

5 October 2017 – If you need to advise HMRC that you need to register for Self-Assessment for the next tax year, this is the deadline. If you became self-employed in the 2016 tax year, this is the deadline to register, through the submission of the CWF1 form for self-employment.

Learn how to register


31 October 2017 – If you want to file your individual tax return on paper instead of online, it must be submitted by 31 October.


31 January 2017 – This is the final deadline for online self-assessment tax returns, unless the notice to file the return was received from HMRC after 31 October 2016, in which case you have three months to file the return. The balance of any tax for the 2015-2016 tax year must be paid.

If you have to make payments on account for your tax bill – including Class 4 National Insurance if you are self employed – the first of those must be received by midnight on 31 January. If you think a previous tax return is wrong, you can amend the tax return for up to 12 months after 31 January.


1 February 2018 – This is when you will be automatically fined £100 if HMRC issued you with a 2016/17 tax return before 1 November 2016. Interest will start to accumulate on any unpaid tax.


5 April 2018 – This is the end of the 2017-2018 tax year.


6 April 2018 – This is the start of the 2018-2019 tax year.


31 May 2018 – Copies of P60 documents should be issued to any employees, where applicable.


6 July 2018 – Copies of P11D documents to be issued to employees, where applicable.


31 July 2018 – This is the deadline for the second payment on account to be made towards next year’s tax bill.

Income Tax Rates 2017/2018

Income Tax Rates 2017/2018

 

Income tax rates 2017/18 2016/17
  Starting rate limit (savings income) £5,000 £5,000
  Starting rate 0% 0%
Basic rate band – income up to £33,500 £32,000
  Basic rate 20% 20%
  Dividend ordinary rate 7.5% 7.5%
Higher rate – income over £33,500 £32,000
  Higher rate 40% 40%
  Dividend upper rate 32.5% 32.5%
Additional rate – income over £150,000 £150,000
  Additional rate 45% 45%
  Dividend additional rate 38.1% 38.1%
  1. If an individual’s taxable non-savings income exceeds the starting rate limit, then the starting rate will not be available for savings income. £1,000 of savings income for basic rate taxpayers (£500 for higher rate) may be tax-free.
  2.  The first £5,000 of dividends are tax-free
Personal allowance (PA)
Personal Allowance 1 £11,500 £11,000
Blind person’s allowance £2,320 £2,290
Married couple’s allowance (MCA)
Either partner born before 6 April 1935 (relief restricted to 10%) 2 £8,445 £8,355
Transferable tax allowance (‘Marriage Allowance’)
For certain married couples and civil partners born after 5 April 1935 (relief 20%) 3 £1,150 £1,100
Tax Shelters
Venture Capital Trust (VCT) up to £200,000 £200,000
Enterprise Investment Scheme (EIS) up to £1,000,000 £1,000,000
Seed Enterprise Investment Scheme up to £100,000 £100,000
Social Investment Tax Relief £1,000,000 £1,000,000

 

R&D Tax Credits for Small Businesses

Research and Development Tax Credits (R&D Tax Credits) 

Although the R&D Tax Credits Scheme has been in place since 2000 many businesses are not aware that they are eligible for these tax credits. Currently, £2 billion in tax credits are being claimed every year.

R&D tax credits are a key part of the government’s strategy to support innovation in the UK.

The R&D Tax Credits incentive scheme is essentially designed to encourage innovation and increase business spending on R&D activities for companies operating in the United Kingdom. It’s one of the government’s most rewarding incentives for encouraging investment in research and development and allows up to 33.35% of a company’s R&D spend to be recovered as a cash repayment..

So one might wonder, what is the catch? 

 

Well, there are restrictions which apply to what can be considered ‘Eligible R&D Expenditure’
Firstly, your business needs to be spending a minimum of £20000 on R&D.
Secondly, your business needs to be actively trading and a going concern.
Lastly, your business should not have paid for the R&D expenses using any other government funding.

What are costs can you claim on?

  • Expenditure on staff including salaries, employer’s NIC and pension contributions.
  • Expenditure on subcontractors and freelancers.
  • Expenditure on materials and consumables including heat, light and power that are used up or transformed by the R&D process.
  • Expenditure on some types of software.

 

How Much R&D Tax Relief are you eligible for?
This depends on whether your business is in loss or profit.

If your business in profit, you are eligible for 26%
If your business is in loss, you are eligible for the higher tax credits rate of 33.35%

 

What is the claims process like?
HMRC processes R&D tax credits. The processing time is only 4 to 6 weeks. The claim can be made via your Company Tax Return (CT600). It is advisable to include an R&D Tax Credits Claim Report to justify the expenses that you are claiming. In either case, you may be contacted by an HMRC agent to verify information in your report or be asked to submit further evidence to support your claims. In some cases, an HMRC agent may need to visit your site to perform further verification checks related to your claim.

 

How can In2Accounting Help ? 

We can assist you with the analysis of your expenditure and calculation of your potential R&D tax credits. We can also submit your Tax Return and R&D Claim. While it is not required, but highly recommended for a successful claim – we will also write your R&D Claim Report detailing your expenditures and their attributes which make them eligible for tax credits.

For a quick, efficient and afforable service get in touch with In2Accounting Team on 02071128229 or email us on team@www.in2finance.co.uk.

 

Learn more about R&D Tax Credits on HMRC Website.

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