How to File Self-Employment Tax in the UK?

 Self-employment is easier said than done, and it entails a great deal of responsibility. You must look after your employees, handle your money, pay your taxes, and submit your own tax returns.

Whether self-employed or not, individuals are required to pay income tax regardless of their source of income. However, self-employed earners frequently fail to file their taxes due to a regular accounting procedure.

What steps must be taken to file self-employmenttax in the United Kingdom?

1. Fill out the self-assessment form provided by HMRC.

• You must notify the taxman of your self-employment status by registering for self-assessment on the HMRC website.

• Bear in mind the deadline: you have until October 5th after the end of the tax year in which you registered for self-employment to register or face fines. Note that the budget year begins on April 6th. So, if you started working by yourself in February, you have eight months to register.

• Your UTR-a letter should arrive within ten days with your 10-digit unique taxpayer reference (UTR)number. When it comes to paying taxes, you'll need this.

• Your online account-HMRC will set up your online self-assessment account so that you may file your tax return when it's due.

2. Register for VAT.

• You may also register for VAT while you're at it. Consumers pay value-added tax on most, but not all, products and services in the UK, which is presently fixed at 20%.

• If your taxable income exceeds £85,000 in a tax year, you must register with HMRC. It's entirely up to you if you earn less.

• You'll receive a certificate verifying your VAT number as well as important dates for submitting your first return and payment.

• It may take up to a month for your certificate to arrive, during which time you will be unable to charge or show VAT on your invoice. You'll still have to pay the tax collector.

• Inform your consumers that you will be charging more to pay the tax during this period and will reissue invoices once you receive your VAT number.

Registering for VAT gives you a greater reputation and professionalism, as well as more privacy when it comes to your revenues.

Filling your tax return

The tax return is divided into two sections. The major portion, which covers employment income, pensions, charity contributions, and benefits. Supplementary pages for persons with income to report through self-employment, real estate, investment gains, being a company director, and working abroad.

You have the option of filing your return online or on paper, but different deadlines apply. The government also plans to phase out paper returns as part of its Making Tax Digital initiative, which will launch in April 2022.