Purpose of self-assessment in accounting

Self-assessment is a system used by HM Revenue and Customs (HMRC) to collect the income tax. Although, tax is usually withdrawn automatically from wages, pensions, and savings, in some cases, people have to fill in a tax return at the end of each tax year.

What information do you need to submit in a Self-assessment tax return?

In the self-assessment, you need to keep statements and receipts throughout the year and complete an online return before the deadline.

You will have to submit complete financial records, HMRC may check your records, and can penalize you if records are not complete, accurate, or readable. Remember that your records must include the following things:

•                    Require documents related to benefits you may receive

•                    Information about overseas income

•                    Documents related to savings, investments, and pensions

•                    Full Details of any rental income

•                    Documents having information about your pay and tax

If you are a self-employed sole trader or partnership, then you need to keep records of:

•                    VAT records (if you are VAT-registered)

•                    Include all expenses

•                    Your personal income

•                    PAYE records (if you employ other people)

•                    Your sales and income

Self-assessment can be complex if you do it by yourself. You can take assistance from Birmingham Accountants who are experienced and can carry out your self-assessment.