Submission of Annual Self Assessment Return
Each year all self-employed individuals will be issued with an annual Self Assessment Return shortly after 5 April. For 2010/11, there is a statutory requirement to complete and submit the Return to HMRC before either 31 October 2011 (if you send back the paper return) or by the 31 January 2012 (if you file online). If you file a paper return after 31 October 2011, you cannot then file another return online to avoid the late filing penalty. If you do not comply with these requirements, you will be fined an initial penalty of £100 and a further £100 penalty at the following 31 July if the return still remains outstanding.
On the return you should make a full declaration of all income received and also claim any allowances to which you are entitled.
After you have calculated your net profit and made any income tax adjustments you arrive at your assessable profit for tax and National Insurance purposes. Under the current Self Assessment regime, you will be taxed on a current year basis. That is to say your 2010/2011 liability will be based on your accounts that end during the fiscal year ended 5 April 2011.
This is a fairly straightforward system for existing businesses but there are special rules that apply when a business first commences.