You should register with HM Revenue & Customs (HMRC) if you need to complete a Self Assessment tax return. For example you may have started self-employment or letting property. HMRC will then decide if you need a tax return. If you do, they””ll set up your tax records and send you a Unique Taxpayer Reference.
Why you might need to complete a tax return
If your circumstances change you may need to fill in a Self Assessment tax return. On the return you tell HMRC about income or capital gains, or claim expenses or reliefs.
For example, you may have:
- started your own business
- untaxed income from property or investments
- expenses to claim (you need a tax return if they””re above £2,500)
- Capital Gains Tax to pay
Why and when you need to register for Self Assessment
You need to register for Self Assessment before you complete your first tax return.
When you register you””ll give HMRC the information they need to set up the right records for you. This helps to make sure you pay the right amount of tax and National Insurance at the right time.
For other changes in circumstances, simply complete the relevant boxes or supplementary pages on your Self Assessment tax return.
When to register
It””s best if you 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.
If, for example, you have tax to pay on rent from a property in the 2011-12 tax year, you need to let HMRC know by 5 October 2012.
If you register late you may have to pay a penalty.
Information you””ll need before you register
You will need:
- Your National Insurance number. In most cases you””ll already have this, but if you haven””t worked in the United Kingdom before you””ll need to get one.
- Your contact details (and the contact details of your business if you””ve started self-employment).
- Your ten-digit Unique Taxpayer Reference number, but only if you have previously completed a Self Assessment return. You””ll find this on letters or forms sent by HMRC about your tax return.
- The date your circumstances changed.
How to register
How you register depends on your circumstances.
If you””re newly self-employed
You can let HMRC know about your new self-employment by registering online for business taxes. You””ll be asked for information about yourself and your business. HMRC will set up tax records for you using the information you provide, for example:
- Self Assessment
- National Insurance
- PAYE if you have people working for you
A Self Assessment Online account will be set up for you automatically at the same time.
If you””re restarting self-employment
If you””ve worked for yourself before, HMRC will already have Self Assessment records for you and you should have a Unique Taxpayer Reference already. You can find this on letters and Self Assessment statements from HMRC. You can still re-register online for Self Assessment, using the link below. It””s the easiest way to make sure that HMRC have all the information they need. You””ll need to register separately for other business taxes, such as PAYE for employers.
If you””re starting or joining a new business partnership
If you””re starting or joining a new business partnership, both the partnership and each partner need to be registered for business taxes.
The partner nominated to receive and send in the Partnership Tax Return can register online.. A Self Assessment Online account will automatically be set up for the partnership at the same time. If the partnership is employing other people, HMRC will use the information to set up PAYE records as an employer too.
If you””re not the nominated partner, you still need to register as a partner in the business. HMRC will use the information you send to set up the right Self Assessment and National Insurance records for you.
You can do this online. It will help if you have information about the partnership to hand before you start, for example:
- address and postcode
- Partnership Unique Taxpayer Reference
- Company registration number (if registered with Companies House)
If a company, trust or another partnership becomes a partner in the partnership, it needs to be registered too. The person responsible for the new partnership, for example, the trustee or company secretary, should complete and sign form SA402.
If you need a tax return for any other reason
You may need to complete a tax return because your circumstances have changed. You may, for example, have income from property or capital gains that you need to tell HMRC about. In this case you””ll need to complete and send form SA1 Registering for Self Assessment.
What happens once you’ve registered for Self Assessment?
Getting a reference number
Once you””ve registered for Self Assessment, HMRC will set up your records and send you a letter with a ten-digit reference, called a Unique Taxpayer Reference or UTR. You should keep your Unique Taxpayer Reference in a safe place.
If you””re self-employed and you registered for business taxes online, accounts will automatically be set up for each HMRC Online Service that you selected. You””ll receive an Activation Code for each service and you””ll need to activate each one within 28 days.
In all other cases you””ll need to sign up for HMRC Online Services yourself, before you can send your Self Assessment tax return online.
Sending your first tax return
You””ll get a letter, usually in April, telling you when you need to send your first tax return. HMRC may get in touch earlier if you need to send a tax return back for a previous tax year. If you don””t receive a letter or a tax return, you should contact HMRC.
Other things new businesses need to consider
If you””re self-employed as a sole trader or a business partner, you””ll usually need to arrange to pay your Class 2 National Insurance contributions straight away too.
You may also need to register for VAT and the Construction Industry Scheme.
Source: HMRC, © Crown Copyright, Open Government Licence