Private Individuals - Income

Learn more about self-assessments here

If you need help with your accounts, contact one of our accountants today.
Give us a call on 01384 569 197 to discuss how we can help you.

The tax year for the UK usually runs from the 6th April to the 5th April the following year. The tax year refers to how much income you earn in a one year period, and how much of that income is taxable. If you are employed by a company, on the PAYE scheme, then your tax is done for you by the company. There are a few reasons why you may need to file an annual income tax return, and why you may use a personal accountant.

Working for yourself brings more freedom, and allows you to earn money for you instead of a company. This type of business is subject to an annual income declaration, and requires you to fill in an annual income tax form. This also includes if you are in a non-limited partnership. The taxable income is worked out from money in against money out, but there are limits to what you can claim as a business expensive.

Company directors are the main or major shareholder in a limited company. They are technically employees of that company but are subject to an annual income tax return on earnings outside PAYE. Dividends will require a self-assessment, as they are paid out of profits from the company, and outside PAYE.

Many people have some form of side job, popular ones being eBay sellers and Etsy craft makers. The UK tax rules allow up to £1,000¹ of tax-free trading income each year. If you bring in additional income above that threshold, you will also need to fill in a Self Assessment.

Self-assessments need to be completed by January of the following year, and you are responsible for filling accurate information. If the self-assessment is submitted late, you could be subject to late penalty fines. These fines can be added each month your return is delayed. If the details submitted to HMRC are inaccurate, whether or not this was an accident, it could result in penalties. This is usually only applied if the form was submitted carelessly. If there are some minor issues then they may request you clarify or resubmit your return, which takes up your time.

A personal account has several benefits, more than just being a person to file your returns for you. They can help with bookkeeping, payroll, and also vat returns. Bookkeeping gets more complex the larger your operation grows, or the more you need to claim as business expensive. Personal accountants look for what you can claim, and ways to lower your tax burden, while remaining legal.

The fundamentals of accountancy can be found anywhere, the job of an accountant is to understand your business, and work and with you, to get you tax efficient. Sandwell Accountancy Services are fully qualified personal accountants based in the historic Black Country area. Taking every care to lower your businesses tax burden. Get in touch with us today! Call 01384 569197.