SELF ASSESSMENT | Wong Yip Accountants

SELF ASSESSMENT

Self-declaration

UK residents per tax yearIf 1) self-employed earning more than £1,000; or 2) a partner in a business partnership; or 3) as an employee(wage earners)have an income of £100,000 or more,It is necessary to go to the HMRC of the British Revenue and Customs within the specified time for self assessment (Self Assessment) and tax payment. In addition to salary, the declaration content also includes dividends, commissions, property rental income, etc. Taxpayers can calculate the taxes they need to pay through self-declaration.

Self Assessment method

Generally speaking, UK residents can complete their own tax returns online or by mailing tax forms:

Online declaration by HMRC

You need to register a government Gateway account on the UK government website first, and then open a personal tax account at HMRC to complete tax declaration procedures.

Declare by mail

You can go to the UK government website to download the SA100 tax return form, fill it out and mail it to the designated address. It should be noted that the postal declaration needs to be completed 3 months earlier than the online declaration deadline.

Information required for Self Assessment

Before filling out the voluntary tax return, you need to prepare the following information or documents:

Personal information: name, address, National Insurance Number (NI number)
Income details: company name, salary income within the tax year, commissions and tips, stock or bank time deposit interest, rent, company profits, etc.
Tax deduction information: charitable donations, pensions, professional fees, raw material expenses, work-related expenses deduction (applicable to self-employed persons)

UK Income tax

British income tax is calculated in a progressive manner. Income generally refers to all salaries, remuneration, benefits, pensions, investments, etc. obtained through work. Note that all income is calculated globally, that is, for example, if you have a job or rent in Hong Kong You must declare your income in pounds sterling:

Total income from April 6 2022 to April 5 2023

tax rate

First £12,570

£12,571 to £50,270

20%

£50,271 to £150,000

40%

Over £150,000

45%

UK Capital Gain tax

Unlike Hong Kong, UK residents need to pay tax on the proceeds when they sell their assets. As for how much tax to pay, it depends on the taxpayer's income tax band.

income tax band

property tax rate

20%

10%

Basic tax band: 18%

40%

20%

28%

Investment tax rates (stocks, business assets, etc.)

National Insurance (NI)

British National Insurance (NI) is one of the government's taxes. It is an extremely important insurance system. Anyone can be protected when they are retired, unemployed, or sick. It is divided into 5 categories, and the tax objects or requirements are different. , and different from general income tax, NI is levied on each job or every situation. For example, if you have two jobs, you need to pay NI tax for each job, and they will not be calculated together. , the following are the types of NI and tax objects:

NI type

tax object

Class 1

general employee

Class 1A/1B

employer

Class 2

Self-employed (annual income£6725 or above)

Class 3

voluntary

Class

Self-employed (annual income more than £11,909)

FAQ

The UK will use the Statutory Residence Test (SRT) to determine whether a person is a UK tax resident:

1. Automatic Overseas Test: You will be considered a non-UK tax resident if you meet one of the following conditions for the tax year:

Live in the UK for less than 16 days;
Have been non-UK tax residents for the past 3 tax years and lived in the UK for less than 46 days in the current tax year;
Work full-time overseas and live in the UK for no more than 90 days, of which the number of days worked in the UK does not exceed 30 days.

2. Automatic UK Test: You will be considered a UK tax resident if you meet one of the following conditions for the tax year:

Live in the UK for more than 183 days;
Own the only home in the UK and live in that home for more than 30 days, while living in other countries for no more than 30 days in the tax year;
Be employed full-time in the UK.

3. Sufficient Ties Test: If you have not achieved a definite residency status in neither the Automated Overseas Test nor the Automated UK Test, this will be based on your ties to the UK. This includes factors such as family ties, residential ties, work ties and 90-day ties.

FAQ

When should self assessment be filed?

How long do I need to keep the relevant documents of self assessment (Self Assessment)?

Is it necessary to self-declare self-assessment?

What is a UK tax resident?

What is the use of paying British National Insurance (NI)?

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