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Where Taxpayers and Advisers Meet

Self Assessment dates and periods

Rob11
Posts:3
Joined:Sat Nov 28, 2020 4:24 pm
Self Assessment dates and periods

Postby Rob11 » Sat Nov 28, 2020 4:46 pm

Hi,
I'm new to the whole self assessment and tax return process and have few questions. I have a job and get a monthly salary through PAYE, I therefore never needed to file a self assessment. Recently I got into trading and I think I now need to send one. It hasn't been requested by HMRC however it's my take after reading their conditions on capital gains report - you need to report if your capital gains are above the CGT allowance or if total sold assets amount is higher than 4 times the CGT allowance.

So first of all I'm not sure if I should just report it by myself whenever I fall into one of these conditions or wait for HMRC to request it, if someone could confirm this it would be great.

Now the main topic is about dates. I know that the financial year is April to April, however I read that the self assessment and tax return have to be made by end of January and then there is something about 2 payments on account that I don't understand. Let me set up an example to picture it:

April 2020 - start of financial year 2020-2021 - I know that I will earn a stable salary of 50,000£ through the year and I don't have to worry about the self assessment because it is going through PAYE. By November 2020 I make a separate profit with investments or trading and I have now capital gains equal to 20,000£. Am I now required to file a self assessment by January 2021 and pay the due capital gains taxes at the same time ? What if my capital gains go up again in February, since it is still the same financial year when am I supposed to pay taxes for this part ?

And how would these payments on account play out in this same scenario ?

Thanks.

bd6759
Posts:3586
Joined:Sat Feb 01, 2014 3:26 pm

Re: Self Assessment dates and periods

Postby bd6759 » Sat Nov 28, 2020 6:33 pm

The tax year ends on 5 April.

A tax return covers a complete tax year. That means you cannot complete a tax return or self assess until after the end of the ta year.

31 January following the end of the tax year is the normal date for filing a self assessment.

If you are not asked by HMRC to file a tax return you have an obligation to tell them that you are liable to tax. You must do the before 5 October following the end of the tax year.

If the scenario posed, if you make chargeable gains that exceed your annual allowance in the period 5 April 2020 to 5 April 2021 you must tell HMRC by 5 October 2021. HMRC will then require you to complete a tax return. You will have 3 months (or until 31 Jan if that is later) to complete the return and self-assess.

Tax has to be paid by 31 January (or the date the return is due if later). If your liability is only capital gains tax there are no payments on account.

Rob11
Posts:3
Joined:Sat Nov 28, 2020 4:24 pm

Re: Self Assessment dates and periods

Postby Rob11 » Sat Nov 28, 2020 7:04 pm

Thanks a lot for this clear answer, I get it now.

My next question would be then how do I notify HMRC ? Do I simply register for Self Assessment as self employed - here https://www.gov.uk/register-for-self-assessment/self-employed - before October 2021 ?
It's the self employed which is bugging me because it is not really a job, more like a profitable side hobby.

bd6759
Posts:3586
Joined:Sat Feb 01, 2014 3:26 pm

Re: Self Assessment dates and periods

Postby bd6759 » Sat Nov 28, 2020 9:22 pm

The gist of your post was that you were buying and selling shares. That gives rise to a capital gain. It is not a “trade or profession” which gives rise to income tax, so in that sense it is not self-employment.

https://www.gov.uk/register-for-self-assessment/not-self-employed

Rob11
Posts:3
Joined:Sat Nov 28, 2020 4:24 pm

Re: Self Assessment dates and periods

Postby Rob11 » Sat Nov 28, 2020 10:51 pm

Got it, thank you for explaining.


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