SELF ASSESSMENT
ORDER OF PRESENTATION:
1.
2.
3.
4.
5.
6.
7.
WHAT IS SELF ASSESSMENT (SA).
WHO ARE REQUIRED TO FILL OUT SA FORM.
IMPORTANT DATES.
BASIC INFORMATION
CASE STUDY – TOM JONES
JONES HARDWARE
MULTIPLE CHOICE QUESTIONS?
SELF ASSESSMENT
SYSTEM!
• SYSTEM INTRODUCED IN TAX
YR 1996/97.
• SYSTEM WHEREBY THE TAX
PAYER ACCOUNTS FOR
INCOME EITHER PARTIALLY
TAX/NOT TAXED AT SOURCE.
• TAX PAYER LEGALLY
RESPONSIBLE FOR SA
RETURN.
WHO ARE REQUIRED TO
FILL OUT SA FORM?
• INDIVUDUAL RECEIVING
INCOME NOT TAXED AT
SOURCE.
FOR E.G.
BUSINESS INCOME – SOLE
TRADER/PARTNERSHIP.
HIGHER RATE TAXPAYER.
ALL DIRECTORS OF
COMPANIES.
IMPORTANT DATES –
SURROUNDING SA.
• TAX YEAR – 6TH APRIL TO 5TH
APRIL.
E.G. TAX YR 2009/10.
6TH
APRIL 2009 TO 5TH APRIL
2010.
ISSUE OF SA RETURNS:
• END OF APRIL FOLLOWING
TAX YR.
• COMMENCEMENT OF TRADE
– NOTIFY WITHIN 3 MTHS OF
END OF 1ST MONTH TRADE
START UP.
IMPORTANT DATES –
SURROUNDING SA.
• REGISTRATION FOR SA –
SA1 (REGISTRATION FORM)
• HMRC WILL SEND – UTR
NUMBER.
• ALTERNATIVE – FILE SA ON
LINE OR RECEIVE PAPER
BASED TAX RETURN.
FILING DATES:
• PAPER RETURN – FILE BY
31ST OCTOBER FOLLOWING
TAX YR.
• FILE ON LINE – FILE BY 31ST
JAN FOLLOWING THE TAX
YEAR.
• E.G. TAX YEAR 2008/09 –
FILE DATE ON 31ST JAN
2010.
TIME LINE FOR TAX.
TAX YR 08/09
6TH
APRIL
2008
5TH
APRIL
2009
31 ST
OCT
2009
31ST
JAN
2010
• Paying your tax
PAYMENT DATES:
• ‘YOU MUST PAY ANY AMOUNT
DUE FOR 2008-09 BY 31
JANUARY 2010. THIS PAYMENT
DEADLINE IS THE SAME
WHETHER YOU'VE FILED ON
PAPER OR FILE ONLINE’.
(TAKEN FROM HMRC)
PENALTIES:
FIXED PENALTIES:
• THE INITIAL PENALTY IS £100
IF THE RETURN IS NOT FILED
BY THE DUE DATE.
• A DAILY PENALTY CAN BE
IMPOSED OF £60 PER DAY.
TAX GEARED PENALTIES:
• IF THE RETURN HAS NOT
BEEN FILED OVER 12
MONTHS OF ITS DUE DATE
THEN A TAX GEARED
PENALTY MAY BE IMPOSED.
BASIC TAX
INFORMATION:
PERSONAL ALLOWANCE
• £6035 (IF YOU DON’T USE YOU
LOSE IT)
INCOME SOURCES
• EMPLOYMENT INCOME.
• RENTAL INCOME
• TRADING INCOME
• INVESTMENT INCOME
CLASSIFICATION
• OTHER INCOME (EMPLOYMENT,
RENTAL, TRADING ).
• SAVINGS INCOME –
(BANK,BUILDING SOCIETY
INTEREST)
BASIC TAX INFORMATION:
ORDER OF TAXATION:
DIVIDENDS – 3RD
SAVINGS – 2ND. E.G.
1. BANK INTEREST.
2. BUILDING SOCIETY
INTEREST.
OTHER INCOME - 1ST. E.G.
1.EMPLOYMENT INCOME
2.RENTAL INCOME
3.TRADE INCOME
BASIC INFORMATION – INCOME TAX
RATES.
INCOME TAX RATES & TAXABLE BANDS -2008/09
BASIC RATE: 20%
£0 - £34800
HIGHER RATE: 40%
OVER £34800
(APPLIES TO OTHER INCOME & SAVINGS INCOME)
DIVIDENDS - BASIC RATE 10%
DIVIDENDS - HIGHER RATE 32.5%
BASIC INFORMATION – NATIONAL
INSURANCE CONTRIBUTIONS.
CLASS 2 AND CLASS 4:
CLASS 2 - £2.30 PER WEEK.
CLASS 4 – BASED ON TRADE PROFITS.
LOWER PROFIT LIMIT £5,435
8%
UPPER PROFIT LIMIT £40,040
ABOVE UPPER PROFIT LIMIT
1%
USEFUL INFORMATION FOR THE
PREPARATION OF ACCOUNTS
YOUR BASIC RECORDS WILL NORMALLY INCLUDE:
• A RECORD OF ALL YOUR SALES, WITH COPIES OF ANY
INVOICES YOU'VE ISSUED
• A RECORD OF ALL YOUR BUSINESS PURCHASES AND
EXPENSES
• INVOICES FOR ALL YOUR BUSINESS PURCHASES AND
EXPENSES, UNLESS THEY'RE FOR VERY SMALL
AMOUNTS
• DETAILS OF ANY AMOUNTS YOU PERSONALLY PAY
INTO OR TAKE FROM THE BUSINESS
• COPIES OF BUSINESS BANK STATEMENTS
CASE STUDY – TOM JONES.
FACTS:
EMPLOYED
HIGHER RATE TAXPAYER
INCOME NOT TAXED AT SOURCE – RENTAL.
WIFE VOLUNTARILY UNEMPLOYED.
CASE STUDY 2.
FACTS:
SELF EMPLOYED.
BUSINESS 3 YRS OLD.
LOSSES MADE IN YR 1 AND YR 2.
LOSS RELIEF IN OPENING YEARS.
MULTIPLE CHOICE QUESTIONS:
• 1 – WHO IS RESPONSIBLE FOR SA RETURN?
A. HMRC
B. THE TAX PAYER
C. THE TAX PAYER’S EMPLOYER
• 2 – WHEN DOES THE ONLINE SA RETURN
HAVE TO BE FILED FOR TAX YR 2008/09?
A. 28TH FEBRUARY 2009
B. 31ST JANUARY 2010
C. 31ST JULY 2009
MULTIPLE CHOICE QUESTIONS:
3. WHAT IS THE INITIAL PENALTY FOR MISSING THE
DUE DATE FOR FILING?
A. £150
B. £250
C. £100
4.TAX YR 2008/09 – WHEN DOES IT START AND END.
A. 6/4/2008 TO 31/3/2009
B. 5/4/2008 TO 6/4/2009
C. 6/4/2008 TO 5/4/2009
MULTIPLE CHOICE QUESTIONS:
5. ORDER OF TAXATION ON INCOME SOURCES.
A. OTHER INCOME, DIVIDEND INCOME,
SAVINGS INCOME.
B. DIVIDEND INCOME, OTHER INCOME,
SAVINGS INCOME.
C. OTHER INCOME, SAVINGS INCOME,
DIVIDEND INCOME
THE END.