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Who needs a UTR number anyway?

by Admin

** 25/01/21 HMRC updated their guidance to state that they would not be issuing fines for late self-assessment tax return submissions until 28th February 2021. However, the deadline of 31st January remains for payments and any late payments will incur interest at 2.6%.

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If you are a self-employed sole trader, partnership or limited company in the UK a Unique Taxpayer Reference (UTR) number is required. The number is unique to the individual or organisation and will never change.

You will also need a UTR if you have other forms of income or expenses that require you to file a Self-Assessment tax return.

Should you not yet have a UTR you will be unable to submit your self-assessment tax return and could run the risk of upsetting HMRC. Penalties are introduced by HMRC for late filing**.

So, to help reiterate the importance of UTR numbers and how to correctly acquire your own, we’ve asked Mike Parkes from GoSimpleTax to shed some light on their role in tax return submissions.

What is a UTR?

A UTR helps HMRC identify and process tax returns against the correct taxpayer’s records.

If you have income outside of PAYE or own a business and don’t act compliantly when it comes to your Self-Assessment tax return, you could face criminal prosecution.

Who uses them? 

Any individual with self-employed income or income from rental property probably forms the biggest group that will need a UTR.

These individuals will need to perform a Self-Assessment tax return. For other taxpayers, it may also be relevant when registering for the Construction Industry Scheme or working with an accountant.

How can I get one?

As you won’t receive a UTR number unless you’re registered as either self-employed or a new business, you’ll need to do so on HMRC’s website. Alternatively, you can call them on 0300 200 3310. There is no cost to doing either.

Be careful if you have already started trading. HMRC expects you to register within at least three months of the end of your first month in business. They will consider strict penalties if you fail to do so.

To avoid these fines, register as soon as you can with all the below information to hand:

• Full name
• Date of birth
• Email address
• Home address
• Phone number
• National Insurance number
• The date you started self-employment

Double-check that you have fully completed the process if you’re still waiting on your UTR following registration.

What if I’m already registered?

You should already have a UTR code somewhere. If you’ve misplaced it, start by checking any correspondence that you may have received from HMRC. All previous tax returns will reference it, along with any notices you may have had to file a return, payment reminders or statements of account.

In addition, your HMRC online account will also display the code, provided you can access it. If none of these options prove fruitful, contact the Self-Assessment helpline.

About GoSimpleTax   

​GoSimpleTax software submits directly to HMRC and is the solution for freelancers and the self-employed alike to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.

Get started today, it is free to try – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.

Tags: HMRC, income tax, Self Assessment, self employed, self employment, tax return

The Paper Tax Self-Assessment Tax Return – What you need to know.

by Admin

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The paper return deadline is this month, 31^st October, therefore we thought it would be useful to invite Mike Parkes from GoSimpleTax to explain how best to prepare for the Self-Assessment tax return submission and file with confidence.

New comers to submitting Self-Assessment tax returns, should know it pays to know that there are three ways of filing. Firstly, you can submit via the HMRC site and receive instant acknowledgement post-submission. You can also use commercial software to do this for you. Or, you can send a paper tax return to HMRC in the post.

Whichever method you choose, it’s important to understand your exact responsibility. For those who are self-employed sole traders or Landlords letting out UK property, paper submissions can be complicated as they involve additional forms and documentation.

1. Be conscious of the deadline

Should you choose to file a paper tax return, don’t forget to file before the 31^st October deadline. We would recommend sending your paper submission prior to the October deadline, either through recorded delivery or with some proof of posting in order to prove your compliancy.

If you miss the deadline for submitting your paper return, don’t be tempted to file it late – you have until 31^st January to complete one online. Just don’t submit both. You will be charged penalties from the 1^st February for any late submissions.

2. Organise supplementary pages

Remember, it isn’t enough to submit the main SA100 tax return. You need to bundle it together with the rest of your documentation that references your property or self-employment income.

For any income as a landlord, all that’s required is to file an additional form (SA105) and submit it alongside your regular Self-Assessment tax return.

However, with self-employment, the additional sections required of you could be either the SA103S or the SA103F. The difference between the two is that the former is for those who had an annual turnover below the VAT threshold for the tax year (£85,000 as of 2019/20), and the latter is for those who earn above the VAT threshold.

3. Be open to online and prepare for Making Tax Digital for Income Tax

While you may have historically always submitted your tax return by paper, the vast majority of tax returns are now submitted online. Improvements in technology and the extra three months to file are the main incentives to submit an online tax return.

Having an online account with HMRC allows you to not only extend your filing deadline but also check your details at any time to see how much tax is due and act accordingly.

If you’re happy to tweak the way in which you keep your records and adopt digital record-keeping, this will help minimise admin further, as well as enable you to submit your tax returns and automatically calculate your tax.

Going forward as of April 2023 you will have to file your self-assessment digitally to HMRC providing updates every quarter via your digital platform.

Preparation is key, adopt the right approach now it could save both time and money, make the move to digital ahead of the deadline for MTD for Income Tax.

About GoSimpleTax

GoSimpleTax software submits directly to HMRC and is the solution for self-employed sole traders and anyone with income outside of PAYE to log all their income and expenses. The software will provide you with hints and tips that could save you money on allowances and expenses you may have missed.

Trial the software today for free – add up to five income and expense transactions per month and see your tax liability in real time at no cost to you. Pay only when you are ready to submit or use other key features such as receipt uploading.

Tags: Self Assessment, self employed, self employment, tax return

Self-Employed Sole Traders in the new tax year – where do you start?

by Admin

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The new tax year started on the 6^th April – that we do know for sure.

At times it felt like everything else changed and at a very quick pace. Our world slowed down – working from home where possible, home schooling our children the #StayHomeSaveLives were on windows with rainbows.

People settled into ways of working from home with daily routines including video calls to keep connected with fellow employees, following pop quizzes on the radio or simply taking time to reflect. Kids following PE lessons, craft tutorials and Disney princesses via online platforms while parents worked.

As this way of life continues for the foreseeable how can you be more productive?

One main cause for concern is money, knowing your financial stance helps you plan for the future. By getting ready to calculate your 2019-20 tax return – you will have your income and tax liability ready.

Digital copies of receipts and paperwork can be saved allowing for a clear out of the home office.

Whilst you do not have to submit right now, being safe in the knowledge of your outgoings for tax means you can then focus on sales and plan for the future.

The government stepped up and offered financial support

As the pandemic picked up pace and businesses were restricted by the Government the self-employed sat waiting and hoping they would be thrown a life-line. Chancellor Rishi Sunak gave them the Self-Employment Income Support Scheme.

The scheme is open to self-employed individuals or a member of a partnership who:

• Have submitted their Income Tax Self-Assessment tax return for the tax year 2018-19.
• Traded in the year 2019-20
• Are trading when they apply, or would be except for COVID-19
• They intend to continue to trade in the tax year 2020-21
• They have lost trading/partnership trading profits due to COVID-19

For a further in-depth review of the scheme please follow the link above or visit www.gov.uk

Please note you had until 23^rd April 2020 to file your 2018-19 self-assessment tax return to be eligible for this scheme.

A further helping hand was offered for anyone who uses Payments on Account, they will have their normal payment due on 31^st July deferred –  this payment won’t be due until 31^st January 2021.

Another deferral was that of the VAT payments due before 30^th June 2020, these will now not need to be made until 31^st March 2021. However you will be required to file your VAT return.

There were earlier announcements made by the Chancellor in March 2020 with an emergency £330bn financial package to bolster the UK economy. These included a business rates holiday and for struggling firms, loans.

There were postponements too for the controversial tax reforms to off-payroll working rules, more commonly known as IR35 – these have been postponed until April 2021 to help ease some strain from the pandemic and the effect it is having on businesses and individuals.

In 2019, it was announced that the Personal Allowance would be increasing from £11,850 to £12,500. Thanks to the increase, the tax brackets in the UK were also to be pushed back. Specifically, the basic rate limit was increased to £37,500 and the higher rate threshold was set at £50,000.

In April 2020 the Capital Gains Tax allowance increased to £12,300. Anything above the allowance, though, will be taxed at 18% for basic-rate taxpayers and 28% for additional-rate taxpayers. The Capital Gains Tax Allowance is the amount you can make from the increased value of your possessions tax-free.

GoSimpleTax bring you their award winning software, which factors in all the latest updates.

With GoSimpleTax software, filing has never been easier as it does all the calculations for you and thanks to features that allow you to take a picture of expenditure and upload it to your records, as well as log all forms of income.

With the documentation you need in one place and learning resources to help minimise your tax liability further, all that’s left for you to do is press submit.

Take their free trial today, no credit card required.

Tags: April 2020, Employed and Self Employed, HMRC, income tax, Loans, national insurance, personal allowance, self employed, self employment, tax rates, VAT