There are a number of reasons why someone should register for Self Assessment with HM Revenue & Customs. If you decide to become self-employed, you will need to register for Self Assessment; or if you receive income from property or investments which is untaxed or over £2,500. In some jobs, employees may claim expenses and if these exceed £2,500, the individual must register. If you are a director of a company or earn more than £100,000, you will also be required to register for Self Assessment. If you don’t have a PAYE tax code and you start to receive income which is more than your personal allowances for the year, you may have to register for Self Assessment. From 7th January 2013, new legislation regarding child benefit for individuals who earn more than £50,000 will be introduced, which means that you may also be required to register.
In all cases where a person has registered for Self Assessment, a tax return will be issued each year where the Self Assessment criterion exists. If you believe that you no longer have Self Assessment criteria and don’t need to complete a tax return, contact HMRC immediately. When you have registered, you will be sent a Unique Taxpayer Reference number by HMRC. This number is made up of 10 digits and should be stored securely as you will need this for all future communication with HMRC. When you register with HMRC for Self Assessment, ensure that you do so as soon as possible to avoid a ‘failure to notify’ penalty. If you realise that you need to complete a Self Assessment tax return, you must let HMRC know immediately. However, the latest date that you should inform HMRC is 5th October, following the tax year in which you received the income. For instance, if you become a company director on 10th June 2012 you will need to complete a 2012-13 tax return; and in this situation, the latest date that you should inform HMRC is 5th October 2013.
Once you realise the need to register for Self Assessment, you will need to contact HMRC. For this, you will need your National Insurance number and your contact details, which will include your business address if you have become self-employed. If you have been registered for Self Assessment before, you will have a Unique Taxpayer Reference (UTR) number and this should also be given to HMRC. You may be able to use the same UTR, but HMRC will inform you at the time. If you are self-employed, you will also be asked whether you have any employees so that a PAYE scheme can be set up for you.
If you have registered online, you will have an account automatically created for each HMRC Online Service that you require. You will receive an Activation Code shortly after registering which should be activated online as soon as possible. If you didn’t register for Self Assessment online, you will have to register for HMRC Online Services independently. The Unique Taxpayer Reference will only be sent to you once you have registered for Self Assessment. It is crucial to include this number on all correspondence to HMRC as this will identify your records. Your annual tax return, reminders and other correspondence from HMRC will already include the UTR. If you lose your UTR it can be found on your tax return, statement of account or a notice to file a tax return which will be sent by HMRC. As Self Assessment can be complex and you may require professional advice.
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