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A guide to Self Assessment in FreeAgent for sole traders

This article explains how FreeAgent helps pull together the figures for your Self Assessment tax return and provides a tax liability calculation.

Background

Nearly all business owners have to file a Self Assessment tax return, or tax return for short, every year.

As a sole trader, your tax return will show details of your share of the business's profit (which will be all of the business's profit). Your tax return will also show any other income you may have, such as bank interest and any tax reliefs you're entitled to, for example if you've donated money to a charity under the Gift Aid scheme.

Your tax return must be filed with HMRC by 31st January after the end of the tax year, so long as you file it online. If you file late, you'll be fined at least £100 - further information is available on HMRC’s deadlines and penalties page.

Self Assessment pages

There are different pages in the Self Assessment area of FreeAgent, corresponding to different parts of the tax return:

1. The Main Return

The main page in the return shows your personal details and simpler sources of income such as bank interest and dividends from shares, and tax reliefs such as those on some pension contributions.

2. Employment

If you are an employee of a business, use the employment page to report your wages and any benefits you received from your employer. If you have more than one job, you must fill in an employment section for each job.

3. Self Employment

Self-employed individuals (sole traders and partners) should fill in the self employment page to report business profits. FreeAgent will fill in most of the boxes using the information entered in your account.

4. Tax Adjustments

This page contains an overview of your tax liability and NICs (National Insurance Contributions) due, and allows you to include details of tax adjustments including applying for a reduction in your payments on account.

At the top of each page, you will see the total amount of tax and class 4 National Insurance contributions that you owe.

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This figure is calculated using your FreeAgent data and the figures that you enter as you complete your Self Assessment tax return in FreeAgent. You can find a step-by-step breakdown of this calculation in the ‘Your tax breakdown’ page in the Self Assessment area. Please note that any payments on account you have to make for the following tax year are not included in the calculation.

Unsupported Self Assessment pages

While the current pages should cover the needs of most FreeAgent users, there are parts of the Self Assessment tax return that FreeAgent doesn't currently support. These include:

  • UK Property
  • Foreign Income
  • Capital Gains summary
  • Trust Income
  • Residence, remittance basis etc
  • Anything on the SA101 Additional Information form
  • Additional self-employment pages

If you need to complete any of these pages then you won't be able to use FreeAgent to submit your Self Assessment tax return.

Filling in the tax return pages

Before you get started, make sure that you’ve explained all your bank transactions for the tax year that you’re filing for, and that you’ve filed, or marked as filed, month 12 payroll for that tax year (if applicable).

To find your tax return in FreeAgent, navigate to the 'Taxes' tab at the top of the screen and select 'Self Assessment' from the drop-down menu.

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Select the relevant user from the drop-down menu.

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Select the relevant tax year from the list or from the 'History' drop-down menu.

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Each page of the Self Assessment tax return is accessed via the ‘Your Tax Return’ menu on the right, which has five tabs for sole traders and also indicates whether any pages are still in progress.

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Each page in the return is broken down into a number of sections, which contain the data and boxes you need to fill in to complete the tax return.

If you need to fill in a section, choose 'Yes' for that section. Any sections that remain set to ‘No’ won’t be included in your tax return. 

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Some of this data is pre-populated for you, based on records already in FreeAgent, but you'll have to fill in some boxes yourself. Many of these boxes are optional but some are required, and these are indicated with an orange outline. If a box isn't relevant to you and isn't required, just leave it blank.

FreeAgent will automatically save the data you've entered into the boxes as you progress down the page, so you don't have to worry about forgetting to save your data.

If you still need to complete some of the required information on a page, you’ll see an ‘In Progress’ notification at the top of each page. This indicates how many sections or questions still need to be completed.

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For individual sections that haven't been completed yet, the status of that section will show as 'Incomplete'.

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When all the required questions have been answered, and all the required sections completed, these statuses will disappear.

Before you file your Self Assessment tax return, you should double-check that you’ve completed all the sections that are relevant to your business, as FreeAgent doesn't know exactly which sections of the tax return apply to you.

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