Rushing to complete your tax return ahead of 31st January? Don’t worry, you’re not the only one, and there are some very straightforward answers to the questions that might be perplexing you right now.
It’s also worth noting that HMRC has temporarily delayed the late filing penalty, so you have until 28th February 2022 before you are fined. Read the full details on gov.uk, but do still try to meet the deadline of 31st January if you can.
The first three of these questions apply to all small business owners, but the last couple are for FreeAgent customers specifically.
Do I need my tax code to file my Self Assessment tax return?
No. This is because tax codes are only used to calculate a Personal Allowance with PAYE income. Self Assessment doesn’t take tax codes into account; everybody is awarded the same Personal Allowance. The only exception to this is if you have income of over £100,000, at which point the Self Assessment Personal Allowance starts to reduce.
How do I pay my Self Assessment tax bill?
Although you can file your tax return to HMRC from within FreeAgent, you still need to pay your tax bill directly to HMRC. The government has published a detailed guide on how to do this. If you’re a FreeAgent user, once you’ve made the payment, you can explain it in your FreeAgent account under ‘Money Paid to User’ and then ‘Drawings’.
What’s the difference between an accounting period and a basis period?
Your accounting period is a time period that you choose to run your accounts to. For most businesses, this time period is a year. Your basis period is the time period that HMRC uses for tax. If your accounting year end doesn’t match HMRC’s tax year end, the difference in these periods can cause overlapping profits and reliefs. Find out more about accounting and basis periods here.
Why do I get an error message from HMRC when I try to file my tax return?
Seeing an error message when you submit your Self Assessment can feel frustrating, but it’s usually easy to fix. Here are a few common areas to double-check in your FreeAgent account:
- Make sure that you’ve entered your UTR (Unique Taxpayer Reference) number correctly. You can update this by editing your user profile in your FreeAgent settings.
- Check that you’ve entered your Government Gateway ID and password correctly. If your Government Gateway password is more than 12 characters then only enter the first 12 in FreeAgent. If your browser fills in fields automatically, make sure it isn’t putting your email address into this box.
- Ensure you have enabled online filing for Self Assessment with HMRC.
- Check whether you have either a negative dividend figure (if you’re a limited company shareholder) or a negative figure in a ‘cost of sales’ or ‘admin’ expense category (if you’re a sole trader). If you have a negative figure in either of these areas, you will need to move the figure to another category before attempting to file again.
You can find out more about Self Assessment error messages in our Knowledge Base.
I’ve filed my return through FreeAgent but it’s not appearing when I log in to HMRC. What does this mean?
It can take a few days for HMRC to process your tax return, especially in January. Please be assured that the IR or ‘Inland Revenue’ mark on your completed tax return in FreeAgent is proof of your submission. You can check it by looking for the ‘IR Mark’ at the top right of any of the tax return pages in FreeAgent. The IR Mark is a software-generated reference that helps confirm whether the submission HMRC has is correct.
Not using FreeAgent yet? Try a 30-day free trial and find out how much simpler next year’s tax return could be.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.