SELF ASSESSMENT

ORDER OF PRESENTATION:

1. WHAT IS SELF ASSESSMENT (SA).2. WHO ARE REQUIRED TO FILL OUT SA FORM.3. IMPORTANT DATES.4. BASIC INFORMATION 5. CASE STUDY – TOM JONES6. JONES HARDWARE7. 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.

6TH APRIL 2008

5TH APRIL 2009

TAX YR 08/09

31 ST OCT 2009

31ST JAN

2010

PAYMENT DATES:

• Paying your tax • ‘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 INCOMECLASSIFICATION• OTHER INCOME (EMPLOYMENT,

RENTAL, TRADING ).• SAVINGS INCOME –

(BANK,BUILDING SOCIETY INTEREST)

BASIC TAX INFORMATION:

ORDER OF TAXATION:

SAVINGS – 2N

D. E.G.1. BANK INTEREST.2. BUILDING SOCIETY INTEREST.

OTHER INCOME -

1ST

. E.G. 1.EMPLOYMENT INCOME2.RENTAL INCOME3.TRA

DE INCOME

BASIC INFORMATION – INCOME TAX RATES.

INCOME TAX RATES & TAXABLE BANDS -2008/09BASIC RATE: 20% £0 - £34800HIGHER 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

UPPER PROFIT LIMIT £40,040ABOVE UPPER PROFIT LIMIT

8%

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:EMPLOYEDHIGHER RATE TAXPAYERINCOME 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. HMRCB. THE TAX PAYERC. THE TAX PAYER’S EMPLOYER• 2 – WHEN DOES THE ONLINE SA RETURN

HAVE TO BE FILED FOR TAX YR 2008/09?A. 28TH FEBRUARY 2009B. 31ST JANUARY 2010C. 31ST JULY 2009

MULTIPLE CHOICE QUESTIONS:

3. WHAT IS THE INITIAL PENALTY FOR MISSING THE DUE DATE FOR FILING?

A. £150B. £250C. £1004.TAX YR 2008/09 – WHEN DOES IT START AND END.D. 6/4/2008 TO 31/3/2009E. 5/4/2008 TO 6/4/2009F. 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.