How to File a Self-Assessment Tax Return Online: A Step-by-step Guide

How to File a Self-Assessment Tax Return Online: A Step-by-step Guide

Taxes for all pensioners and employees are automatically deducted from their source wages through the pay as you earn (PAYE) scheme.

If you're a trader or you get your income from other sources not taxed automatically, you need to report it to the HMRC through the self-assessment tax return online or as a paper tax return every year. 


Filing your self-assessment tax return online can be a daunting process. Prior planning and preparation will make everything smooth, and you will file your returns even before the deadline of 31st January. 


Who is Eligible for Filing a Self-Assessment Tax Return Online?

If you're self-employed, it's a requirement that you submit your self-assessment tax returns once every year. This pays for your national insurance and income tax on your trade profits. 


In an instance where your primary source of income is from pension or wages, you may still be required to send a self-assessment tax return online if you trade in other sectors where you received more than £100,000. 


These include private pensions, investment income, tips and commission, renting, and foreign income. 


If you operate a limited company, you have to file a company tax return and a self-assessment tax return online on your personal income. 


How to File a Tax Return: Step-by-step

  1. Register for Self-Assessment

If you're a newbie and want to file your self-assessment tax return online, you first have to register with HMRC. You can effortlessly do this online through the HMRC website or contact an online tax advice services in Manchester to help you through.


The registration process varies for each individual, depending on whether you're registering as a self-employed, partnership, or employed person. 


If you had registered before, you'll only need your unique taxpayer reference (UTR) number to log in and submit your self-assessment tax return online


  1. Use the UTR Number for Setting up the Government Gateway Account

Immediately after registering for a self-assessment tax return online, you will receive a UTR number. If you can't get it, be sure to contact HMRC for more information about it.


It comes along with instructions that will guide you on how to set up a Government Gateway Account. 

  1. Gather all Details Needed to Submit your Returns

As you wait for an activation code to set up a Gateway account which may take up to 20 days, you need to have at hand all the information you'll need to submit a self-assessment tax return online. 


These include:

  • A National Insurance number
  • Your UTR number 
  • Records of all expenses related to your trade to help calculate your tax. These could be: Operational costs, uniforms, staff costs, rent, marketing/advertising, and other financial costs.
  • All income you've received from your business, rent, overseas, dividends, investment, etc.
  • Details of partial tax payments you've made, if any. 


  1. Fill in Your Tax Return and Submit

After everything is set up, it's now time to fill your self-assessment tax return online carefully. Take as much time as you need to fill out relevant sections that apply to you.


You can always save the draft and continue later.


Go through all the recorded information when submitting a self-assessment tax return online before you submit it.


After submission, a confirmation and code number will be sent to you. You should always keep this number for reference. 


After submission, the tax amount you owe will be calculated and sent to you for payments before the deadline.  


You can pay your tax upon reporting the self-assessment tax return online through telephone banking, debit card, CHAPS, direct debit, your bank, or cheque. 


Important Dates to Keep in Mind

  • 31st January is the key date to remember. It is the deadline for filing your self-assessment tax return online and pay your tax. Failure to which exposes you to a £100 penalty for filing late.

From 1st February, interest will begin to accrue for any outstanding payment at 2.6% of the total cost.


The good thing is that if you're filing a self-assessment tax return online, you have a grace period of up to 28th February, after which late payments will face the fine as mentioned above. 

If the deadline falls on a weekend or holiday, ensure your self-assessment tax return online payment gets to HMRC on the immediate working day before the deadline. 

  • 5th April is the end of a tax year, while 6th marks the beginning of the next tax year. This means if you were self-employed between 6th April 2020 to 5th April 2021, and you earned more than £1,000, it's mandatory that you file a self-assessment tax return online. 


  • 31st October is the deadline for submitting paper returns.


  • 31st July is the due date for the second payment on account. 


Late Payment Penalties and how to Appeal

After submitting your self-assessment tax return online, late tax payment attracts an instant fine amount of £100, which may get steep. Three months after that, you will incur additional fines of £10 every day for 90 days.


At six months since your defaulting, you will get an extra charge of 5% of the amount due or £300. If a year passes and you're still yet to file your self-assessment tax return online, you'll need to pay all the penalties and an additional £300 or 100% penalty of the tax due. 


You may also have to pay interest on the tax due and more penalties on the same.


You can appeal for a penalty against late payment of self-assessment tax return online if you have genuine reasons like:


  • A close relative's death just before the deadline.
  • You were suddenly ill and hospitalized.
  • You had a life-threatening illness
  • You were affected by flood, fire, or theft.
  • You experienced software failure in the course of filing your self-assessment tax return online, which includes system issues with the HMRC website.


You should note that late filing will only prompt HMRC to scrutinize your returns keenly. You should, therefore, complete the self-assessment tax return online form early to beat the deadline and avoid stress.