The self assessment system is for those people who have more complex tax affairs. Many people will have straightforward affairs that are dealt with through PAYE, but others may have multiple sources of income – pensions and employment, or other types of income that need to be declared to HMRC in order to pay the correct amount of tax. There are many forms available in the self assessment process so that you can inform HMRC of all income and any changes to circumstances.

Registering

If you fulfil the criteria for self assessment, you must inform HMRC as soon as possible. Form SA1 can be completed and submitted to HMRC to let the organisation know that you need a tax return. You will be given a Unique Reference Number, which should be used on all correspondence. A tax return will be issued for the appropriate year. If you are self employed, complete a form CWF1 so that you can also register to pay National Insurance Contributions.

If you are forming a partnership, you will need to complete a form SA400, although each partner will be registered after completion of form SA401. Any partner that isn’t an individual – including a company or trust – must complete a form SA402.

Many people choose to have an agent or advisor acting on their behalf when dealing with HMRC. If this is the case, a form 64-8 must be completed so that HMRC has your authority to discuss your tax affairs with a third party.

Returns

A tax return has to be completed by everyone within the self assessment system. The form SA100 is the main tax return, but certain types of income or any capital gains must be reported on one of the many supplementary pages. There is a short tax return for those who have straightforward affairs and income below a specified level. Partnerships also have to complete an alternative tax return.

Appeals against penalty charges

If a return or other self assessment form isn’t submitted by the relevant deadline, a penalty will be charged. There may be a reason why the document wasn’t submitted in a timely manner, and you can appeal against the penalty. If you have submitted a document after the deadline and received a penalty, you can appeal on form SA370 and this is also used for making a late payment. Penalties for the late filing of partnership tax returns can be appealed using form SA371.

You can appeal against any decision within self assessment using one of the forms available. Seek professional advice for more information.

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About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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