What Is Tax Self Assessment
July 21st, 2009. Published under Accounting. No Comments.
In many countries around the World, self-assessment is a way of life for all citizens. The nearest example being in France, where they do not enjoy the benefits of the PAYE (Pay As You Earn) system of deducting income tax from employees pay automatically. Instead, there is a far more complicated system of settling your income tax liabilities and the onus is upon the individual employee to make sure they keep back enough income at the end of each financial year, to ensure they can meet their bill. Some of the best employers in France recognise that their staff struggle with this commitment each year and they therefore have 13 salary payments throughout the year. This is all aimed at relieving that financial pressure, through income tax, at this dreaded time by way of paying the 13th instalment of the salary.
Here in the UK, most people will never need to worry about self assessment. This is because their employer will take care of all of these liabilities and payments for them. It is only if you are self-employed that you should need to worry about self-assessment.
Self-assessment is exactly as the name suggests - a way of assessing your tax liability yourself. You can do this by either filling in a self-assessment paper form or it is now becoming increasingly popular to submit all of your details online. If you work for yourself, you have a responsibility to declare the amount of income and capital gains that you have received during a tax year (April 6th to April 5th the year after). You will then be liable to pay income tax and applicable National Insurance contributions on the amount that is over your personal tax allowance.
The self-assessment forms are returned to Her Majestys Revenue and Customs (HMRC) and this is where you will also find the online forms that can be completed and submitted straight away. The HMRC are trying to encourage more and more people to adopt this method of submission and they provide extended time deadlines for people looking to self-assess in this way. Eventually, it is inevitable that paper self-assessment forms will become a thing of the past and you will not be able to file your tax return in this way.
For some people, they may neither have the time, nor the experience to go ahead and file a self-assessment form themselves. This is where it can be very beneficial to have an accountant acting on your behalf. They will ensure that you adhere to any relevant deadlines and will scrutinise your receipts and invoices (which you must have kept back throughout the year), to provide you with an accurate tax bill at the end of the financial year.
So, if you do have a responsibility for self assessment, why not investigate the possibility of having an accountant do this for you. It will save you lots of time and leave you free to get on with running your own business and earning that vital income.
Find the best Wrexham chartered accountants at http://www.accountingsol.co.uk/