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Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
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Self Assessment - what's this ?
As a freelance contractor, you are required to self assess the amount of income tax and capital gains tax payable each year and submit an annual tax return to HMRC.
HMRC will send you a tax return that is tailored to your circumstances. You should receive this in April. The UK tax year runs from April 6 to April 5 the following year. If you submit your return by September 30 following the issue in April, HMRC will calculate your tax for you. The deadline for the submission of the Tax Returns is January 31. If you fail to file your taxes by then, you will be fined £100.
The tax return contains details of all sources of:
-taxable income
-taxable gains
-reliefs and allowances
If you file your tax return after September 30, you will need to calculate the amount of tax payable. This can be done for you by a qualified accountant or by a suitable tax return software package.
Your self assessment tax liability is due on January 31 following the end of the tax year. HMRC require payments on account for the following tax year, to be made on January 31 and July 31 following the end of the tax year.
For contractors who are caught by IR35, the self assessment liabilities payments are likely to be small or nothing, since income will be dealt through the PAYE system and the tax liabilities are due each month according to your tax code.
For contractors outside of IR35, any additional tax due will depend on whether or not you are a higher rate tax payer.
If you are not a higher rate tax payer then your self assessment tax liability will most likely be small, because your salary will be dealt through PAYE and your dividends up to the higher rate tax threshold will not incur further tax liability. For higher rate tax payer, the self assessment tax liability based on the higher rate tax arising on your dividend income over the higher rate tax threshold.
The arising liability will be the balance outstanding, for instance HMRC will give you full credit for all PAYE tax deducted at source and tax credit on dividends, you just have to pay the balance of your liability at the 31st of January, together with the payments on account.
See Also
HMRC Compliance
Recommended Links
HMRC - self assessment
HMRC will send you a tax return that is tailored to your circumstances. You should receive this in April. The UK tax year runs from April 6 to April 5 the following year. If you submit your return by September 30 following the issue in April, HMRC will calculate your tax for you. The deadline for the submission of the Tax Returns is January 31. If you fail to file your taxes by then, you will be fined £100.
The tax return contains details of all sources of:
-taxable income
-taxable gains
-reliefs and allowances
If you file your tax return after September 30, you will need to calculate the amount of tax payable. This can be done for you by a qualified accountant or by a suitable tax return software package.
Your self assessment tax liability is due on January 31 following the end of the tax year. HMRC require payments on account for the following tax year, to be made on January 31 and July 31 following the end of the tax year.
For contractors who are caught by IR35, the self assessment liabilities payments are likely to be small or nothing, since income will be dealt through the PAYE system and the tax liabilities are due each month according to your tax code.
For contractors outside of IR35, any additional tax due will depend on whether or not you are a higher rate tax payer.
If you are not a higher rate tax payer then your self assessment tax liability will most likely be small, because your salary will be dealt through PAYE and your dividends up to the higher rate tax threshold will not incur further tax liability. For higher rate tax payer, the self assessment tax liability based on the higher rate tax arising on your dividend income over the higher rate tax threshold.
The arising liability will be the balance outstanding, for instance HMRC will give you full credit for all PAYE tax deducted at source and tax credit on dividends, you just have to pay the balance of your liability at the 31st of January, together with the payments on account.
See Also
HMRC Compliance
Recommended Links
HMRC - self assessment