How to fill in a UK Self Assessment Tax Return in 2025!

Hi folks and welcome back to the show. Ignore the clobber. I'm off to the gym very shortly. But I just wanted to quickly get this video out because it is that time of year again. The 31st of January is rapidly approaching. So a lot of you are probably panicking about getting your tax returns done on time. And as per usual on this channel, I'm going to take you through what the UK self- assessment tax return system looks like in 2025. So this is for the 202425 tax year which is due on the 31st of January 2026. If you're not aware on this channel, I'm not an accountant, but I've been involved on the small business side of things for pretty much 30 odd years now. And I have been filling in tax returns for a long, long time. And a major reason for putting these videos together is to kind of record for posterity sake what the UK tax return system looks like over time. and I've been making these videos for a long time now. So, as I say, we're going to mix things up a little bit and we're going to not only have a look at how I go about tracking self-employment income, but I'm also going to add bank interest and dividends just to kind of show you how you would log that sort of information. So, to keep things really straightforward, I'm going to assume you've got a self-employed business with a turnover of 30 grand, expenses of 10 grand. That means you've got a profit of 20 grand. And we're going to pretend that you've been lucky enough to earn £5,000 in bank interest and £5,000 in dividends as well. So, let's head over to the computer and I'll show you how I would go about filling in a UK self- assessment tax return based on those numbers. So, here we are on the usual login to self- assessment tax return uh URL. I'll include a link down in the description below if you don't know where to find this. And then I'm just going to go down to sign in. Get rid of all the ridiculous cookie warnings. And straight away we've got a little change here. Look at this. We've got a new uh sign in option. I'm sure that wasn't there last time. So, we've got the gov. uk1 login option. Now, if you're not familiar with what that is, maybe that warrants a separate video, but we'll just go in with Government Gateway as per normal. Continue. Oh god, cookie warnings. So, just sign in with your Government Gateway username and password. And that is me into my personal tax account. Now, I'm just going to click on self assessment. We can see our tax return is due by the 31st of January 2026. And I'm just going to click this button here to complete our tax return. Blah blah. We're just going to go through all this, have a read through what's new, fill in all of your personal details. I'm not going to take you through that. And then we'll get to the section where we're going to tailor our tax return. And we're going to add a few extra sections in here just to make it a bit more interesting. Were you an employee or director? No, you're just self-employed. So, we're going to just leave that as no. And then we're going to head down to self-employment. Yes, we were self-employed with over £1,000 in turnover. How many self-employed businesses did you have? We just say one. Business name, as per usual, Andy Mack drums. Were you in a partnership? No. Did you have income from land or property? No. Foreign income? No. We're also not going to do the capital gains section. Save and continue. And then page two, did we receive interest? We're going to say yes to that one. And did we receive dividends? For argument sake, we're going to say yes to that one as well. I'm saying no to pensions and no to child benefit and no to other UK income. No income tax losses and no pension saving tax charges. Save. We didn't put anything into a personal pension. We didn't give to charity. No. No. No. And nope. So, we're into the nuts and bolts of the tax return now. And we've filled in all of the personal information. We've told it what sections we want in our tax return. So, we can now go all the way down to self-employment. Let's add in the self-employment details first of all.

And we'll just quickly scan through this. Did you have a turnover of more than 90 grand? We're going to say no. Were you affected by basis period reform? We're going to say no to that. And then obviously do read all of this, but I'm just going to say none of those apply. So description of business, I'm just going to put drum teacher. I'm not going to put a postcode in. Has your business name changed or anything? No. We'll just leave the start date thing as well. And we'll haven't ceased trading. This is a tax return for the 2425 tax year that I'm showing you here. So, the dates the books are made up to are probably going to be the 5th of April, 2025. Did you use traditional accounting or cash basis? We're going to say that we used cash basis. I think it defaults to cash basis now to be honest. And then turnover. So, as per usual, I'm just going to put 30 grand turnover. No other income. I'm not going to put a trading allowance in. And then expenses. I'm going to enter as a single figure. And I'm going to say there's been £10,000 worth of allowable expenses. Obviously, you would have to have proof of what those expenses were. So, receipts and records [snorts] and everything that I've talked about in other videos. I'm just going to skip straight past this because we're on cash basis. Save and continue. All of this I'm just going to leave on zero or blank. Same with losses. We're going to assume we haven't like offset losses against previous years or future years or anything like that. We're not using SIS, so we'll just kind of skip past that. We're going to assume that you're not exempt for class 4 nicks. So, none of these apply and save. Any other information? Nope. And that is the self-employment section done. Save and continue. Class 2. Next. I'm just going to say that we're not going to do this because we've made enough money that we're going to have a qualifying tax year for national insurance purposes for your pension, for your state pension. But if your profits are less than £6,725, you might want to pay voluntary class 2 so you get qualifying year. You can read more into that. I think I've talked about it in other videos, but to keep things simple, we're not going to bother with that. Save. And then we get to UK

interest. And what you need in order to fill this section out is your certificate of interest from whatever savings account that you've got. And you should have received that automatically from your savings provider. If they haven't given you one, you can normally go on to like some sort of online portal and download it. Sometimes it can take a month or two before they actually appear and get sent out. One of the many reasons why you're given 10 months to complete your tax return is because this sort of information just isn't available at the 6th of April 2025. But anyway, this is basically broken down into two sections. Interest where you've already paid tax on the interest. So in other words, tax has been taken off by your savings account provider and untaxed interest, which is probably the more likely section that you're going to fill in if you've been receiving gross interest from your savings provider. So, in other words, you haven't paid any tax at all. You've just received the gross figure. And it should tell you that on your certificate of interest that you've received from them. So, this is the one that I'm going to do. And I'm just going to say for argument sake, we've had a really good year. Wow. How much have we had in savings in order to get 5 grand of interest? But yeah, it just it's an easy number to kind of fill in and show you how this works. I'm not bothering with the untaxed foreign interest. So, we'll just do save and continue. And

then we're on to dividends. And again, you should get dividend vouchers from whoever you've been provided with dividends by. So, for example, you might have some sort of stocks and shares um account where you've received dividends from firms that you're invested in. You could have also received dividends as a director. So, again, to keep things simple, I'm just going to say we've received 5 grand worth of dividends. and specifically that is from UK companies. I'm just going to brush past these sections. Do read into this if any of this kind of applies to you and save and continue. Have we had any underpaid tax? Uh the figure of zero is correct. So we're going to say yes, that figure is correct. Again, I'm just going to say this figure is correct as well. Any other debts, we're just going to put zero in this box. any overpaid tax. Like for example, if you're due a tax rebate, where do you want that money to go to? And if you want it to go straight into your bank account, you would just do yourself here. And then it'll ask you to fill in some bank details later on, but I'm just going to put not applicable to save showing you that stage. If you've not paid enough tax, do you want to change your tax code for the next year? No, I don't want to do that. And likewise, no on that one as well. Do you need to make any adjustments? So, we're just going to say no to all of that. Does this contain provisional figures? Nope. Any other information? Nope. Do I want to add an attachment? Nope. And then you would check through absolutely everything and make sure it's 100% correct. You can go back into any of these sections and just verify that what you've put in is all hunky dory. Go all the way down the bottom and we can click next to view our calculation. And then we'll get kind of an overview calculation here. but you're better going into the detailed calculation. So, don't pay a huge amount of attention to this. What I like to do is go all the way down to the bottom. We'll do save

and continue. And then we get another view your calculation page. Scroll all the way down to the bottom of that and you should be able to print it all out. So, if you do print your full calculation, that's what I like to do so that I can refer to it in the future if there's been any queries. So, I normally just save that as a PDF. And as I say, file it away for future reference. But just to quickly take you through this based on the numbers that we've put in there, you can see we've got our profit from self-employment as being 20 grand, which is the 30 grand turnover minus the 10 grand of expenses. We've got 5 grand of interest. dividends. So our total income received is 30 grand minus our personal allowance, which is 12,570. means that our total income on which tax is due is £17,430. And then if we scroll down, we got a breakdown here of how that is taxed. So you can see we've got a basic rate of tax on £7,430. What's going on there, I hear you ask? Well, if you scroll up, you will see that basically what it's done is it's taken off the interest in the dividends. So that's why rather than it being 17,430, it's 7,430 because the interest and dividends are taxed slightly differently. So the £7,430 is taxed at 20%. We've then got our savings allowance of £1,000 which has been deducted automatically from the £5,000. That leaves 4,000 left, which also gets taxed at 20%. But because of the latest budget, that will end up going up to 22% in future years or whenever that actually comes into effect. And then if we scroll down a little bit more, we've got our dividends. And you can see here we've got a £500, very generous £500 dividend allowance. So out of the five grand worth of dividends, there's 4 1/2 grand worth is going to get taxed at the moment at 8. 75%. But because all our government does is put taxes up, that is now going to become 10. 75% in future years. But uh yeah, okay, great. And that means yeah, £393. 75 dividend tax there. And that essentially means that all of our tax due after allowances is basically that number there plus that number which comes to the £2,679. 75. We've then also got class 4 national insurance on top of that just a bit extra tax. So that is based on your pay and profits and things like that. So your self-employment income effectively which is this number here or your taxable income. So that's going to be charged at 6%. So there's another £44580. So we then add that number onto that number and that comes out with a total tax bill of £3,1255. And then we've got the glorious payment on account kicking in. So we're going to have that total 3 and a bit grand there plus an extra 50% which will be due also at the same time on the 31st of January. So that means our total tax bill this year is actually going to be £4,688. 32 and then in the following July you'll have to pay that remaining 50%. So, your second payment on account, which will be £1,562. 78. Thank you very much. Kaching. So, as I say, from there, you would print your full calculation, save it as a PDF and keep it very safe. Save and continue. I am not going to claim to reduce my payment on account, painful though it may be. And then from here, you would save a copy of your return for future reference. I would normally just go straight down to this color copy here. So, view PDF and then save a copy of this somewhere very, very safe because if you ever get audited, it's going to be very useful if you've got a copy of what you actually submitted to HMRC. Then go down to save and continue. And then you get to the final scary bit of actually submitting your tax return. Fill in the declaration, press submit. I can't do that because all of the information on here is bollocks. But that is it for this specific example in a nutshell. And finally, if you've made a complete hash of your tax return and you just want to start all over from the beginning, all you would do is click on the welcome option on the top right there and then scroll all the way down to the bottom and click delete your entire tax return. Are you sure you want to delete it? Yes. And that's you back to the beginning again where you would just click this file a return option here to basically start all over again. So there you go folks. I hope that has

been useful. Do remember, as per usual, I am not an accountant. I'm just showing you how I would go about doing things. If you're not entirely sure what you're doing, I would always suggest at least for the first couple of years that you get an accountant to look over things and double check that you're doing it correctly. But once you've done it for one year, if it's relatively straightforward, you can probably do it yourself. I mean, it is called self assessment. Now, one little quite big thing I would like to point out is that using my figure of 30 grand turnover, that's actually quite a bad turnover number to have because it's potentially going to make you liable for making tax digital not next year, but the year after if you had that turnover figure. Remember, making tax digital kicks in from the 6th of April 2026 if you had a turnover of 50 grand in the previous tax year and it's going to be 30 grand in the tax year after that. And eventually, apparently, it's coming down to 20 grand and maybe even lower than that in the future. Who knows? And unless you particularly want to make your life more difficult by going down the making tax digital route, despite what people say about making your life easier, it absolutely doesn't. I mean, don't get me wrong, I'm all for digitization of the tax system and using tools to help make your life as easy as possible, but the big changes of making tax digital is that you're going from having 10 months to complete one tax return to potentially having to complete a quarterly update where you're providing HMRC with the exact same information that you would provide in a tax return. Which again, when people say, "Oh, well, you don't have to do a full tax return every quarter. " And it's like, "No, you don't have to do a full tax return, but you need exactly the same figures that you would have to put on a full tax return. " So, yeah, you're providing that every quarter potentially with a 1 month lead time to get those figures over to HMRC plus your usual end ofear tax return. So there's no getting away from the fact that no matter how efficient your systems are, you are creating extra work for yourself by going down the mainten route because you would never have had to do those quarterly updates before. But more about that probably next year because it's all going to kick off as I say from the 6th of April 2026. And uh yeah, it's going to be popcorn time. Judging by the comments on my videos on this channel, I don't think things are going to go well at all for an awful lot of small businesses out there. And bearing in mind with 50 grand turnover, you're probably barely bringing in minimum wage. Anyway, folks, we'll leave it there for now. As per usual, I don't generally accept sponsorships on this channel because the sponsorships tend to tie you to things that you don't want to be tied to. And I've always wanted this channel to be completely independent and I don't want to be forced to say things that I don't want to say. And if I want to say a product is good or a product is bad, I will tell you that. And as a result, I've turned down a lot of sponsorships on this channel. And the only way that is possible is because of people supporting the channel over on the members area on the Small Business Toolbox website. So, if you found my videos useful and you want to say thanks and you've got a couple of extra quid left over in your business bank account, it would be awesome to have you on board as a channel member. As a big thank you from me, you'll get access to a whole load of extra downloads and things that you wouldn't normally have access to. For everyone who is supporting me over there, thank you so much. You are literally keeping the lights on this channel. And I've got loads more things I want to tell you about. So, do hit subscribe, sign up to the newsletter if you haven't done so already, and uh yeah, if this is my last video before Christmas, I'm not entirely sure if it is going to be. Have a fantastic Christmas, have a fantastic New Year, good luck on your small business journey, and we shall see you next time. Tly bye.