Self-Assessment (SA 100) Services
Services:
◉ Self-Assessment Tax Services:
● Employer vs. Self-Employment: If you are employed by an employer, that employer is responsible for paying your PAYE tax, national insurance, and pension payments. However, if you are self-employed and work for yourself, then an annual tax return needs to be submitted to HMRC detailing your annual income and expenses, hence reaching the tax liability and national insurance payments. We at Businesswise Accountants specialize in self-assessment tax returns and will serve you with the best expert skills and knowledge.
◉ Who Needs to Submit a Self-Assessment Return:
● Obligation to Inform HMRC: If you are self-employed, it is your responsibility to inform HMRC about the income you received and expenses you incurred, even if you have made losses or no profit. Moreover, if you haven’t started trading but have registered yourself for self-employment, then you have to inform HMRC before the deadlines.
◉ What is a Self-Assessment Tax Return:
● Content of the Return: A self-assessment tax return contains taxable income, which will determine how much tax you are going to pay in a particular financial year on income earned through self-employment. This return also includes National Insurance Contributions (NIC) 2 and NIC 4, depending on your profit at the end
◉ How to Register for Self-Assessment:
● Online Registration Process: The quickest and most efficient way to register for self-employment is through online registration. You create a government gateway account after completing the questions. You will receive a unique tax reference number (UTR) within 10 days and afterward receive an activation code. Unique Tax Reference codes are 10-digit codes that uniquely identify you or your business. They’re used by HMRC whenever they’re dealing with your tax.
◉ Advantages of Self-Employment:
● Independence and Creative Freedom: As a self-employed individual, you are more independent in terms of work hours and creative freedom, along with independent decision-making. You can reward yourself for all the work you have done because you are the sole decision-maker here. This will motivate you and bring utmost job satisfaction as a result, and you will feel compensated for all your hard work and will start loving your work.
● Work-Life Flexibility: You can work from home, save money through less traveling cost, and also save time. If you are employed, you are bound to follow a set pattern and similar situations and clients over and over, and this can be boring sometimes. However, as a self-employed individual, you get an opportunity to deal with a variety of clients, which can be beneficial in your personal and professional development..
◉ Disadvantages of Being Self-Employed:
● Tax Responsibility: The biggest downside is that as a self-employed individual, you are responsible for all your taxes and contributions towards HMRC, unlike in employment where tax was automatically deducted from your payment before you received it.
● Lack of Employee Benefits: Secondly, you are not entitled to employee benefits. For example, in recent history, employed persons were furloughed due to COVID-19, but self-employed individuals weren’t as fortunate. Similarly, you are not entitled to holiday pay and sick pay.
● Long Hours and Income Uncertainty: You will have to work long hours instead of fixed hours, and the income stream can be unpredictable and uneven, which will make home budgeting difficult for some people.
◉ Self-Assessment Return:
● Filing the SA100: Self-assessment returns are done via SA100 and basically inform HMRC about your annual income and all allowable expenses. There are other forms to report foreign income, capital gains, and foreign income. It may seem straightforward to figure out total income if you have one stream of income, but it can be difficult when you have more than one stream of income. Categorizing the allowable expenses requires careful treatment from a competent and qualified accountant, and we just do that.
◉ Allowable Expenses:
● Deductible Business Costs: As a self-employed individual, your business will have numerous types of costs that will occur over time. All costs that are allowable can be deducted from total revenue to reach the taxable income. Any expense you have incurred for business purposes is allowable, so careful and delicate treatment of your expenses is necessary to minimize your tax liability and stay compliant.
● Examples of Allowable Expenses: A few examples of common allowable expenses are material costs, staff costs, power costs, vehicle costs, property rental costs, and there are many more which can only be specific to your business and industry.
◉ Payment of Tax Bill:
● Methods of Payment: Self-assessment tax bills can be paid through most contemporary payment methods, including direct debit payment, online transfer, at your bank, cheque payment, and online or phone transfer. If you only have a few days left to pay your tax bill, then online transfer is the best option compared to cheque payment.
◉ Payment on Account:
● Advance Tax Payments: Payments on account are advance tax payments towards your next bill. If, for a particular year, your tax liability is more than £1000, then you have to make advance payments towards the next year’s tax bill. The first payment on account is in January before the tax year ends, and the second payment is in July. Payment on account is based on the tax bill of the last year, and any outstanding amount after tax submission should be paid before 31 January of the following year. If you believe your next tax liability is going to be significantly less than last year, you can inform HMRC and request them to reduce your payment on account bill.
◉ Why You Need Us – Expert Opinion:
● Complexity of Self-Assessment: Tax returns for self-employed individuals or businesses can be strenuous and complex tasks that demand delicate handling of all income and expenses to reach a true and fair tax liability.
● Professional Assistance: You need a competent and qualified accountant who will ensure that you stay compliant with tax rules and that all your requirements are met on time.
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Whether you’re looking to optimize your tax strategy, streamline your bookkeeping, or navigate complex financial regulations, our team of experienced professionals is here to guide you every step of the way. Book your free consultation today and take the first step toward financial clarity and success!
