Reviewed by Ryan Carman ATT, Head of Operations at RIFT Refunds.

Figuring out all the little details of UK tax compliance if you are self-employed can feel a bit overwhelming.  However, taking the crucial step to enrol in self-assessment lays the groundwork for streamlining your tax obligations and removing unnecessary stress. This detailed guide will walk you through exactly why self-assessment enrolment matters, provide a step-by-step of the digital registration process, delve into properly completing your ongoing returns, and offer expert tips to simplify self-employed taxes this year.

Who needs to enrol in self-assessment?

If you’re earning over £1,000 in a tax year with no automatic deductions, you will need to register for self-assessment. As a self-employed person, it’s on you to report income, expenses, deductions, losses and final tax liabilities associated with running your own business.

This applies to freelancers, contractors, coaches, virtual assistants, gig workers, direct sellers, creators selling digital products/content and more, basically if you’re flying solo in business. Self-Assessment is a must for sole traders and independent businesses.

Whether you’re working self-employed full-time or boosting your income through a side hustle exceeding the £1,000 annual threshold triggers the need for enrolment. You can technically register even if you’re earning less than the threshold in order to make voluntary National Insurance contributions or formally record business losses for future use.

How to register for self-assessment online

Registration takes just minutes online; a fraction of the time traditional postal forms take. You need to set up a Government Gateway login first, which is quick and secure to create. Then, you’ll need to sign in using a Business Tax Account.

Once you’re signed in on the website, choose ‘Self Assessment’ from the available list of online tax services, and follow the intuitive step-by-step digital prompts to enrol.

You'll need to enter personal contact information, your business address if it’s different than your home, preferred communication details, the day you began trading, and other key details. The system will guide you through each required section, allowing you to save and return if you need to gather more information before submission. You can even set up a delegate in the process - especially handy if you have an accountant, bookkeeper or tax agent.

Double check all your details to make sure they are all correct, making any changes necessary before the final step. One of the major benefits of digital enrolment is fast processing and instant enrolment confirmation upon hitting submit.

Within 15 days, you should receive your Unique Taxpayer Reference (UTR) number in the post, which you’ll need for all future interactions with HMRC and Self Assessment. This number effectively serves as your self-employment identification and tax ID moving forward. Keep this safe in a secure place, digital or physical where it is easy to find when filing your returns.

What's required for self-assessment tax returns?

With self-assessment enrolment approved, the next vital step is properly completing your ongoing tax returns each year. This key reporting ensures accurate income, profit and tax liability calculations which saves money and avoids penalties.

The crucial components of each annual self assessment return includes:

  • Total business income from goods/services sales, assets, rents or other income streams.
  • Thorough supporting documents like invoices backing reported figures.
  • Lists of qualified allowable expenses to offset.
  • Final profit/loss position for your solo business.
  • Total tax payment estimated owed based on total taxable income.
  • Complete personal and business record keeping such as sales receipts, expenditure invoices, bank statements and payment evidence.

Maintaining organised financial records throughout the tax year is the best way to quantify these figures and ensure they’re accurate. Inputting everything meticulously while routinely using available government resources helps limit the risk of mistakes.

Staying on top of deadlines, requesting extensions when needed, making tax payments on time and having an accountant or tax expert to assist can make the process a lot easier. The ultimate goal is to submit fully compliant, accurate returns by the January 31st cut-off to avoid penalties.

Ryan Carman ATT, head of operations at RIFT Refunds says:

Don’t leave doing your self-assessment tax return until January! It can be tempting to put it off if you’re expecting a tax bill but getting it done earlier give you more time to budget for the tax bill. You still won’t have to pay it until 31st January. Another tip, don’t forget to keep hold of all your receipts. Making sure you don’t lose any ensure your tax bill is as low as possible.

Digital tools offer significant advantages

The best part of registering for self assessment online is the time-saving options that open up once enrolled. You'll get password protected account access on for handling forms, uploading docs, payments, guidance and tracking deadlines. You'll also get handy emails and texts to stay on top of to-do items so nothing falls through the cracks. Way easier than paper filing cabinets!

To sum up, self-employed individuals have no choice but to enrol for self-assessment reporting to comply with HMRC regulations once crossing the minimum income threshold. With this guide, you have everything you need to get registered, tackle returns properly, and make the most of online resources.

Need some more guidance? At RIFT Refunds, we know a thing or two about tax preparation. Our specialists can provide assistance with getting you set up, maximising expense/deductions guidance, deadlines, payments and all aspects of being self-employed. Don't tackle taxes alone - we're here to guide you in mastering self-assessment! Contact RIFT today to make self-employed a breeze.

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Self-Assessment -What you need to know

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