ALL ABOUT SELF ASSESSMENTS

All about Self Assessments

What is a Self-Assessment?

Do you work for yourself or have income other than from a salary?  HMRC (the official UK tax collector) may require you to complete a tax return.  This details your income and relevant expenditure in order to calculate how much tax you pay.  This tax return is called Self Assessment. HMRC receive around 12 million Self Assessments each year.

Do you need to complete a Self Assessment?

When you are an employee receiving income via a salary, you are issued a PAYE Code by HMRC.  Your employer uses this tax code on your payslips and it calculates how much tax to deduct from your salary.  If you receive most of your income this way, then often you will not need to complete a Self Assessment.  You can call HMRC or log online to adjust your PAYE code for any additional income earned.

In our experience, most fitness professionals work for themselves.  You are self-employed, if your clients pay you directly or you are not an employee of the studio that you teach at.  You have not declared your income to HMRC nor paid any taxes on it.

Or it might be that you run a studio or gym as a limited company and pay yourself via a salary and dividend.

Either way, it is usual that you will need to complete a Self Assessment.  This lets HMRC know your annual income and related expenses and calculates the amount of tax you will need to pay them.  You will need to prepare a Self Assessment if you are:

  • self-employed with annual earnings over £1,000 per year;
  • run your business as a company and earn more than £10,000 of dividend income from the shares that you have invested in your company; or
  • an employee with addition income from a second property that you are renting out.

This is just a guide as there are other types of income and personal circumstances which we come across at FitAccounts.  If you are unsure if you need to complete a Self Assessment, you can:

You need to complete a Self Assessment tax return – what next?

The UK tax year runs from 6 April to the following 5 April.  Currently, the FitAccounts team are preparing and submitting Self Assessments for the 2023/24 tax year that ran to 5 April 2024.  If you think that you need to complete a Self Assessment for the 2023/24 tax year, then here is what you need to do:

  1. If this is the first time that you are completing a Self Assessment, then you need to register with HMRC by 5 October 2024.  If you are self-employed, you can see how to register on this HMRC YouTube youtube.com/watch?v=bovXqb7H4T8.
  2. HMRC will post you a Self Assessment Unique Tax Reference (UTR) with instructions to register on the HMRC gateway account.  Do set up the gateway account.  HMRC will also send you a notice to complete a Self Assessment return for the 2023/24 tax year.
  3. Next, you should prepare your Self Assessment workings.
  4. Finally, log onto the HMRC gateway and fill the Self Assessment form. Do review it and check the Income Tax and National Insurance calculation.   Remember to submit the Self Assessment to HMRC by the 31 January 2025 deadline.  If you file after this date, HMRC issue an automatic £100 late filing penalty for any Self Assessment.

Alternatively, contact the FitAccounts team who can help you with every step of this process.  Get in touch via fitaccounts.co.uk/contact-us/.

The income tax and national insurance tax is payable to HMRC by 31 January 2025 too.  So, complete your self assessment early to know and budget for what you owe.

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Date published: 6 September 2024

Category: Director shareholders, Self-employed, Uncategorised