Chances are if you are a grown up, you already are aware about tax returns. What you might not know is if you have to file a self-assessment, or the process of filing the tax returns, or how to calculate the tax you need to pay. Note that, currently, Hermes Drivers are classified as self-employed. So you need to do your self-assessment and file for the tax return on time for the respective tax year.
Also, note that the government has tightened the rules for self-employed drivers. Being a Hermes driver, you might already know the debate about whether drivers are self-employed or like an employee of a company entitled to workers’ rights. While that debate is still on, you might want to be up to date when it comes to your tax returns.
Thus, if you are a Hermes driver, here is a little compilation of some handy questions and their answers for you to gain clarity and file a self-assessment.
How do I know if I need to complete a self-assessment?
You need to complete a self-assessment if you are:
- Sole Trader
- Director of a Limited company Or As the director and the only employee of a limited company
- Receiving income that is not taxed at source
You can also check out if you need to file a self-assessment tax return using the tool on the government website gov.uk
It is my first time. How and where do start?
If you fall in any of the categories mentioned in the first question, then the first step should be to register with the HMRC and inform them that you need to file a return. You can fill out the form or register online.
Is there a particular time to register?
You must know that the tax year runs from 6 April to 5 April the following year. So the deadline to register is 5 October, following the end of each tax year. You can also choose to file return and pay the tax online, deadline for which is 31 January the following year.
What happens if I miss registering on or before deadline?
You will likely be fined. You do, however, have the provision to give and prove a valid reason to the HMRC for the delay and can file the return and pay tax owed by 31 January, in which case your fine will either be reduced or removed.
What happens after I register with the HMRC?
The HMRC will send you a Unique Taxpayer Reference Number (UTR) by post. You will use this for filing all your tax return. Once you have registered, you will get a reminder of self-assessment every tax year.
What if later I do not fall in the category where I need a self-assessment?
In such a case, you must have to inform the HMRC. Consequently, you will start filing personal tax and for that you will need to re-register and get a new UTR.
What kind of records will I need to file a self-assessment tax return?
It is a very important question, so, read carefully. Having an organised record will go a long way in saving you the trouble and time. Here is a compilation of the vital financial records you need on your hands in order to complete your self-assessment. Misplaced papers can cost you, so always take care of it. Determine the kind of incomes and expenses you have and record them.
Income from Salary
You will get a form P60 from your employer. In your self-assessment, utilise the information in your form P60 to record you employment income and the respective tax you paid for that particular tax year. If you have any taxable benefits provided by your employer like a medical insurance or company car, then you will need the form P11D and the information on it.
Income from self-employment
You will need to have a record of your income and business related expenses, preferably organised in a spreadsheet or some software.
This is applicable when you own a limited company and are paying dividends. Make sure to have all the vouchers for the dividends for the respective tax year. For someone who has shares in another company that issues them dividends, you will require a relevant dividend certificate.
There can be many other forms of income. Income from partnership being one which will require you to have details of interest received from banks.
If you are renting out a property, you need records of the income and also any expenses you made. Other forms of income are overseas income, pension income, capital gains. You will need to record any student loan and/or any chid benefit you received.
Any important claims that I must take note of?
Good you had this question. You can always save on your tax on any pension contributions you make, make any charity (Gift Aid), and also, by investing in EIS and SEIS companies.
Can I calculate the amount of tax I will likely have to pay?
Surely, you can get an estimation of the tax you might owe by using a tool on the government website.
What is the deadline for filing the tax or for making the payment and any penalties upon missing it?
Best to take note!
|Deadlines for tax filing and making payment||Penalty upon failure to meet it|
|30 October (for paper tax return)||You still have the online tax return deadline|
|31 January (for online tax return)||£100|
|3 months post 31 January||£10 a day (maximum up to £900)|
|6 months post 31 January||£300 or 5% of tax owed|
|12 months post 31 January||Additional £300 or 5% of tax owed|
The rules are laid out but remember they are getting tough. On top of it task of filing the tax return can turn out to be overwhelming for you especially if you have multiple jobs or are self-employed. In such cases, to maximise benefits returns, it is always wise to seek advice from professionals. If you consider talking to one or just need answers to other queries you might have, you can always connect with us via email at firstname.lastname@example.org or call us on 02035002646.