company tax returns

Guide to Filing a Sole Trader’s Tax Return

You’ll need to file a Self Assessment tax return if you’re a self-employed individual who owns your own firm. This allows you to pay the correct amount of income tax and national insurance afterwards.

It can be intimidating to file your taxes for the first time. But it doesn’t have to be that way. This article is designed to assist you in understanding how to prepare your Self Assessment tax return as a sole entrepreneur, so you can focus on your business rather than worrying about taxes.

Register for Self Assessment

You’ll be issued a 10-digit code that uniquely identifies you as soon as you register for Self Assessment. A Unique Taxpayer Reference (UTR) number is what this is called. We recommend keeping this handy for the next steps because you’ll need it when filling out your sole trader tax returns. Keep in mind that you must register for Self Assessment by the 5th of October in the second tax year of your business. So, if you became a self-employed worker between April 6, 2020, and April 5, 2021, you have until October 5, 2022 to register.

Complete and Submit Your Tax Return for Self-Assessment

As a self-employed person, you’ll initially fill out two forms: the SA100 (main tax return) and either the SA103S (form for self-employment if your annual turnover was below the VAT threshold for the given tax year) or the SA103F (form for self-employment if your annual turnover was above the VAT threshold for the given tax year) (the form for self-employment if your annual turnover was above the VAT threshold). However, depending on any other sources of income, you may need to complete certain other forms, such as work income (SA102), UK property income (SA105), foreign income (SA106), trust income (SA107), and capital gains income (SA107) (SA108).

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Late Submission Deadlines and Penalties

The deadline for filing online tax returns, as with all self-employed individuals, is midnight on the 31st of January following the end of the tax year. This is also the deadline for paying any taxes you owe, as well as your first payment on account. The deadline for paper tax returns is October 31st at midnight . On the 31st of July, there is usually a second payment on account deadline. It pays to be organized because failing to send your Self Assessment tax return or paying your tax bill on time can result in a penalty.

Penalties, of course, are something you should avoid at all costs. In fact, we’re betting you likely want to save money anywhere you can. As a sole trader, you have the good fortune of being able to claim a variety of company expenditures.

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