Completing a tax return can be a stressful exercise even if there are few entries to make. When the October self assessment filing deadline approaches the stress levels will rise even further!
Self-Assessment is a system which gives you greater control and responsibility over your tax affairs. It applies to people chargeable to Income Tax who are in receipt of income from sources which are not chargeable to tax under the PAYE system or where some but not all of their tax on these sources of income is paid under PAYE.
Self-Assessment applies for Income Tax purposes to:
- Self-employed persons (i.e. people carrying on their own business including farming, professions or vocations)
- Persons receiving income from sources where some or all of the tax cannot be collected under the PAYE system, for example:
- profits from rents,
- investment income,
- foreign income and foreign pensions,
- maintenance payments to separated persons,
- profit arising on exercising various Share Options/Share Incentives.
Under Self-Assessment there is a common date for the payment of tax and filing of Tax Returns, i.e. 31 October. This system, which is known as "Pay and File" allows you to file your return and pay the balance of tax outstanding for the previous year at the same time. Under this system you must:
- pay Preliminary Tax for the current tax year on or before the 31 October each year,
- make your Tax Return after the end of the tax year but not later than the following 31 October. This is known as the "specified return date";
- pay any balance of tax due for the previous tax year on or before 31 October
- pay any Capital Gains Tax on disposals made between 1st Jan and 30th Sept of the current tax year