What is a self assessment tax return? –
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Introduction 👋
Paying tax can be confusing, especially with so many different types to pay.
A lot of grown-ups might talk about having to do a thing called their “self assessment tax return”.
But what is a self assessment tax return?
And what does it do?
Today we’re going to teach you everything you need to know about self assessment tax returns.
Disclaimer: This website provides information for guidance and educational purposes only. The Grown-Up School does not provide regulated financial advice. You can seek independent financial advice from a suitably qualified and regulated professional advisor. Check out our disclaimer policy for more information.
What is a self assessment tax return? 🤷♀️
A self assessment tax return is an online form that you fill in to pay your taxes.
In your self assessment form, you tell the government about the money you’ve earned and help them figure out how much tax you should pay.
By doing a self-assessment tax return, you ensure that you’re paying the right amount of tax based on what you’ve earned.
Tax returns are where you are open and honest with the government about your money, and it helps them provide really important services to everyone in the country. 🗺️
Who needs to complete a self assessment tax return? 🧐
Mostly, self-employed people or those with extra sources of money/income need to do a self-assessment. 👷♀️
If you have a regular job, your employer might take tax out of your pay before you receive it, so you might not need to do this.
However, if you earn money independently, like running your own business or renting out a house, you’ll need to report that through a self-assessment tax return. 📜
What information do they need for a self assessment return? ✅
The form will usually ask you for details about:
- How much you earn (your income)
- Money you’ve saved
- Money you’ve invested
- and any other sources of money.
Also, it might ask about how much money you spend on your work or business. It’s like putting together pieces of a puzzle to get the complete picture of your finances.
How do you pay the tax for your tax return? 💳
Once you’ve completed your self-assessment tax return, the government will calculate how much tax you owe and tell you how much to pay.
If you’ve already paid some tax through your job or other sources, this will be taken into account.
If you owe more tax, you’ll need to pay it, usually by a certain deadline. 📆
You can then usually pay for your tax through things like:
- Direct debit (set up automatic payments)
- Bank transfer
- Through changing your tax code (so your employer will it on your behalf)
- Debit or credit card
- Cheque
What happens if you don’t complete your self assessment? 🤷♀️
You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill.
You’ll have to pay more if you complete your form really late, or if you pay your tax bill really late!
Conclusion 👍
So that’s it!
A self assessment tax return is an online form that you fill in to pay your taxes.
In your self assessment form, you tell the government about the money you’ve earned and help them figure out how much tax you should pay.
By doing a self-assessment tax return, you ensure that you’re paying the right amount of tax based on what you’ve earned.
Tax returns are where you are open and honest with the government about your money, and it helps them provide necessary public services.
If you know any friends or family members who might benefit from learning about self assessment tax returns, share this post with them!
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