Filling out a Self-Assessment tax return can be a tedious process for many sole-traders. If you have all the information you need and understand the process, then it’s not as bad as it seems. Although the reality is, entering into the new year means that the 31 January deadline is fast approaching!

We’ve got some handy tips on how to fill out your tax return:

1. Take the time to register

If you’re a new business owner and earned over £1,000 of income in the last tax year, or haven’t filed a Self-Assessment tax return before and meet the conditions, there are some steps you’ll need to take with HMRC to kick start the process:

1. Fill out the questions and register online. HMRC will then create an account for you to use for filling out your tax return

2. You’ll need to wait until a Unique Taxpayer Reference number is sent to you until you can fill out your tax return. This could take up to 10 business days and 21 if you’re abroad

3. You’ll then receive another letter with an activation code for your account

Once the 3 steps are complete, you are then ready to fill out your Self – Assessment tax return before the deadline. 

2. Don’t be shy and add everything you’ve got 

When filling out your return, you’ll need to be mindful of adding in all income that you’ve received throughout the year. This includes information such as:

  • All your sole trader income generated from your self-employment activity
  • Any income from property, including a rental or a furnished holiday let
  • Your P60 form showing any employment income and PAYE tax incurred for the year (this will be necessary if you were employed and received a salary, even if it was only as an employee or director of your own company)
  • Any interest from a savings account
  • Dividend income received on shares that you own

3. Living abroad? 

If you’re living outside of the UK, then you may need to file a UK tax return to HMRC and pay tax on UK-sourced income, even if you’re a non-resident for tax purposes. The tax rules for UK residents and non-residents aren’t the same, so it’s important to keep in mind that even if you are officially a resident in another country, you may still be a tax resident in the UK. 

Incomes which you may need to declare are:

  • Wages 
  • Pension
  • Savings interest 
  • Rental income

Determining if you’re eligible for Personal Allowance may help reduce the amount of tax that you pay. It’s best to check with an accountant, or on the HMRC website to see if you qualify. This would mean that you won’t be taxed on the first £12,500 of your income. 

If you’re not able to claim Personal Allowance then you may end up paying tax on all your income; which is usually at 20% for the basic rate band, 40% for the higher rate band, and 45% for the additional rate band. 

Another key point is that the overseas country where you live may tax you on your UK income. The good news is that if it has a ‘double-taxation agreement’ with the UK, you can claim tax relief to avoid double taxation. Brilliant! 

4. Never miss a deadline, use online accounting software

With Clear Books online accounting software, you can manage your business records and expenditure as you go. With our handy dashboard, you’ll see at a glance the tax you owe to HMRC building up throughout the year so you can ensure you’ve always got the cash available to pay your tax return. 

Clear Books has also launched brand new Self Assessment functionality for sole trade and property income. This allows you to instantly generate either the sole trader or property form, calculated based on the accounting records you have entered in the software. You can use this to simplify and speed up the filing of your Self Assessment return, which you can file using HMRC’s online services.

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5. Speak to an accountant

If you think that you’ll need to file a tax return and you’re not feeling confident about it, then speak to an accountant and seek professional advice. Clear Books is partnered with excellent accountants and we would be happy to help! Should you wish to get in touch, then contact our support team for more information.


The information contained in this article is general information only. Please speak to an experienced professional to seek advice based on your situation. 

Posted by Des Dowling