Tax Rebates & Refunds

How self-assessment works

September 16, 2012
Posted in Income Tax — Written by Jennifer

Have you recently become self-employed? Perhaps you have set up your own business? Whether you are an entrepreneur or a self-employed home worker, you will need to learn how to complete your own tax return each year. This process is known as self-assessment.

The following are the basics you need to know about how self-assessment works, and what you need to do to file a tax return.

Registration

Before you can complete a tax return, you need to register for Self-Assessment with HM Revenue & Customs (HMRC). Once you’ve registered, HMRC will send you a letter letting you know it’s time to fill in your tax return.

Your tax return

On your tax return, you will need to fill in your basic details, along with details of your income. You will also have to include tax-deductible expenses, such as the costs of running a business vehicle or the business proportion of your rent and utilities bills.

Calculation and payment

Based on the information you provide, HMRC will calculate the amount of tax you need to pay and let you know either online or by post. You can then make arrangements to pay.

Overpayments and tax refunds

You should let HMRC know immediately if you have made a mistake on your tax return. Even after some time has passed, you can still receive a tax rebate if you spot an error on your tax return.

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