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Employed Persons Self Employed Landlords Other Income

Employed Persons

Usually if you are employed and earn more than £100000.00 per annum, you need to file a self assessment tax return. Following are some basic checks to see whether you are an employed person or not.

You are probably employed if you:

  • Have to do the work yourself
  • Work for one person at a time, who is in charge of what you do and takes on the risks of the business
  • Can be told how, when and where you do your work
  • Have to work a set amount of hours
  • Are paid a regular amount according to the hours you work, and get paid for working overtime even if you do casual or part-time work.

You can also be employed and self employed at the same time, This can occur by working for an employer during the day and running your own business in the evenings.

If you are employed then the employer is responsible for deducting and paying your tax and National Insurance contributions at source through the PAYE system. You are also entitled to certain rights and benefits, such as maternity or paternity leave, sick pay, Jobseeker's Allowance if you lose your job and a State Pension including the additional state pension when you retire.

Self Assesment Guide

Not everyone needs to complete a self assessment tax return. If your tax affairs are straightforward you may already pay all of the tax due on your earnings. But if you have complicated tax affairs a tax return need to be filed. This applies even if you already pay tax through your tax code.

01 So who should file self assessment tax returns?
  • Self-employed persons
  • A company director
  • Partner in a partnership business
  • A trustee
  • Receiving foreign income
  • Ministers of religion
  • Those whop receive untaxed income that cannot be collected through a PAYE tax code.
  • Those who claim annual business expenses of over £2,500
  • If you earn more than £10,000 or more from savings and investments
  • If your income is more than £2,500 from untaxed savings or investments
  • If your income from property is more than £10,000 before allowable expenses or £2,500 after allowable expenses
  • If your income from selling assets and you need to pay capital gains tax on the profit
  • If your income is more than £100,000 a year
  • If your income is taxable but HMRC can't collect the tax through your tax code.
02. When to submit your tax return?

If you send in a paper based tax return, it must reach HMRC by midnight on 31 October. If you miss this deadline you should send your return online. For online tax returns the deadline is midnight on 31 January. You'll have to pay a £100 penalty if HMRC doesn't receive your tax return on time. The later you send your return, the more penalties you will have to pay.
03. When do you need to register for self assessment?

You have to register for self assessment before you complete your first tax return. When you register you have to give HMRC the information they need to set up the right records for you. The best thing to do is to register with HMRC as soon as your circumstances change. The latest you should register is by 5 October after the end of the tax year for which you need a tax return. The tax year runs from 6 April one year to 5 April the next.
04. What information do I need before registering for self assessment?

  • Your National Insurance number
  • Your contact details and the contact details of your business.
  • Your ten-digit unique taxpayer reference number
  • The date your circumstances changed
05. Do you need to file a tax return?

HMRC will contact you, usually in April, if they think you need to fill in a tax return. You'll receive a letter which explains when you'll need to send your tax return back. If HMRC hasn't contacted you, but you think you may need to complete a tax return contact an accountant for advice.
06. Deadlines for filing the tax returns

All paper tax returns should be filed by 31 October each year. All online tax returns should be filed by 31 January each year.
07. Penalties for late filing of tax returns

Length of delay

Penalty you will have to pay

1 day late

A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.

3 months late

£10 for each following day up to a 90 day maximum of £900. This is as well as the fixed penalty above.

6 months late

£300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.

12 months late

£300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead.
These are as well as the penalties above.

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