A Guide To Self Assessment

Financial planning for directors: understanding self-assessment tax returns

Self-employed individuals and company directors are required to complete and return a tax return each year as part of effective financial planning for directors. The tax return details your income and capital gains (profits on the sale of certain assets) and claims for tax allowances or reliefs.

Tax returns account for the previous year of business, which runs from 6 April to 5 April.

Tax returns may be submitted for part years, for example, if you are a new business start-up which has been operating for only a portion of the year to date. This is particularly relevant for directors managing cash flow and forward-looking financial planning.

Who needs to complete a self-assessment tax return?

As part of responsible financial planning for directors, you must complete a self-assessment tax return each year if you are:

• self employed

• a partner in a business partnership

Even if you are not running a business or your tax affairs are more complex, you may still be required to submit a tax return. Those in the following categories may also be required to submit a tax return:

• company directors

• trustees

• persons receiving foreign income

How do I get a self-assessment tax return?

You must register for self-assessment with HM Revenue & Customs (HMRC). A ten-digit tax reference, called a Unique Taxpayer Reference (UTR), will be generated and sent to you. This reference must be kept safe and secure and is an important part of your ongoing financial planning as a director.

HMRC will issue correspondence advising when your tax return is due, usually in April. If you don’t receive any correspondence from HMRC, contact them to make them aware.

Tax returns can be completed on paper or online. Submitting online is quicker, easier, and allows three months longer to file. You must sign up with HMRC for online submissions.

Do I have to complete the return myself, or can I get help?

You may choose to complete the tax return yourself, particularly if your income and expenses are straightforward.

However, for many directors, professional support plays an important role in financial planning for directors, helping ensure all income, allowances and reliefs are accurately captured. In these cases, you may nominate an accountant to act on your behalf and submit the tax return to HMRC for you.

What are the submission deadlines and penalties? 

Paper submissions must reach HMRC by midnight on 31 October.

Online tax returns must reach HMRC by midnight on 31 January.

If HMRC does not receive your tax return in time, penalties will apply. The later the submission, the higher the penalties, which can disrupt cash flow and wider financial planning.

Making a tax payment

Tax payments are due by midnight on 31 January.

For those who also make payments towards the next tax year, known as Payments on Account, further payments are due by 31 July.

As part of sound financial planning for directors, it is recommended to set aside money throughout the year towards your tax bill to avoid financial pressure as deadlines approach.

If you no longer need to send a tax return

You must inform HMRC if you believe you no longer need to submit a tax return.

If HMRC agrees, they will issue written confirmation that a return is no longer required.

Further information and guidance

More information, guidance, and the latest updates can be found on the HMRC website.