Knowing when your self-assessment tax return and tax payment is due is essential – and a common cause of confusion. Here is all the info you need with some helpful examples.
If you would like to discuss your individual circumstances please do not hesitate to get in touch.
What is a self-assessment tax return?
A self-assessment tax return is the system HMRC uses to collect income tax from individuals who receive income that isn’t taxed at source.
The main reasons you might need to complete a self-assessment tax return are that – in the previous tax year – you were a self-employed sole trader who has earnt more than the £1,000 trading allowance or you were a partner in a business partnership.
However, there are other circumstances that require a self-assessment tax return so have a look at our guide to who needs to fill a self-assessment tax return to find out more.
When is your self-assessment tax return due?
The tax year runs from April 6th to April 5th although HMRC will accept a tax year to end on 31st March for the sake of simplicity.
The deadline for online self-assessment tax returns is 31st January following the end of the previous tax year. For paper tax returns, the deadline is 31st October following the end of the tax year.
For those who are on top of their finances and want to get the self-assessment out the way, the earliest you can submit it is on the first day of the new tax year – April 6th.
Example:
Harry starts his self-employed business on 1st September 2023 in the 23/24 tax year.
The tax year ends on 5th April 2024 (although Harry is allowed to use the end date of 31st March 2024).
For the 23/24 tax year Harry can submit his tax return from 6th April 2024 and the online tax return deadline will be 31st January 2025.
When is your tax payment due?
The tax you owe is calculated from your tax return and is split into ‘payments on account’ and a final ‘balancing figure’.
Payments on account aren’t relevant until your second tax year. For your first tax bill, you only pay the balancing figure – the total tax owed in a single payment. This is due on the same deadline as your tax return – January 31st after the relevant tax year.
Unless your previous tax bill was less than £1,000 (or you already pay more than 80% of the tax you owe – for example through the PAYE system via your employer), you will also need to pay your first payment on account towards the new tax year on the same date – January 31st.
The amount due for the payment on account is calculated as half your previous year’s total tax bill. A second payment on account for the same amount is then due by 31st July.
If by the end of the tax year your business has accrued more tax than those two payments on account combined, you will pay whatever is left in the final balancing figure – due once again on January 31st after the relevant tax year. Or if you have paid too much then you will be eligible for a tax refund.
Following on from our example above:
All of Harry’s income comes from his new self-employed business.
His total tax bill for the 23/24 tax year is £4,000.
Because this the first year of his business, this whole of this figure is due on 31st January 2025 (the same deadline as his online tax return).
As his tax bill is over £1,000 and all his income comes from self-employment, Harry is then required to make payments on account.
His first payment on account for the 24/25 tax year is due at the same time as his 23/24 balancing payment – 31st January 2025 – for the amount of £2,000 (calculated as half his previous tax bill).
He will also be required to make a second payment of £2,000 on 31st July 2025.
Harry’s second year in business runs from 6th April 2024 to 5th April 2025.
His online tax return is due on 31st January 2026.
The tax due for this is £4,500.
As Harry has already made two payments on account totalling £4,000 (in the previous January and July) the balancing figure due on 31st January 2026 is £500.
He will also be required to pay his first payment on account for the next year (£2,250) on the same date.
At Lava Sky Accounting we offer self-assessment services as well as making sure you are well informed about all deadline dates. This is one less thing for you to worry about and also means you can avoid any penalties for late filing. Book a free consultation today.