How FreeAgent updates its Self Assessment figures every year
This article explains how FreeAgent updates its Self Assessment calculations every year.
What it involves for FreeAgent
Sole traders, limited company directors and unincorporated landlords can complete and file their tax returns to HMRC using FreeAgent.
FreeAgent calculates your Self Assessment liability from the information you enter into FreeAgent throughout the year against HMRC’s rates and thresholds for that particular tax year.
Before FreeAgent can do this accurately, we must receive a set of finalised data from HMRC first. The first round of this test data is normally released by HMRC in November/December of the tax year in question. Subsequent versions are usually released before HMRC confirms the finalised set of data and shares it with us. This usually happens shortly before the end of the tax year. For example, the set of data for the tax year ending 5 April 2021 was finalised and shared with us in February 2021.
HMRC also finalises payroll guidance around the same time. We ensure that our customers can run payroll from the beginning of the new tax year by implementing payroll changes, then moving on to developing and testing the necessary changes for Self Assessment filing in the new tax year.
Self Assessment filing is normally available soon after the beginning of the new tax year which means you can file in time for the online Self Assessment filing deadline of 31st January in the following calendar year.
What this means for you
If you view your Self Assessment tax return in FreeAgent or your Self Assessment tax liability on your Tax Timeline before the figures for the tax year in question have been updated, the liability you see won’t take into account HMRC’s latest rates and thresholds.
You’ll also be unable to file your Self Assessment tax return through FreeAgent.
During this time, FreeAgent provides a projection of your Self Assessment liability using the rates and thresholds from the previous tax year. You’ll notice that FreeAgent alerts you to this when you access the Self Assessment area of the software.
Once FreeAgent has updated its Self Assessment figures for the tax year in question, the notice will be removed and the ‘Prepare to File Online’ button will be illuminated to indicate that filing has been enabled.