Self Assessment for sole traders
This article explains how Self Assessment for sole traders works in FreeAgent.
FreeAgent uses the financial data you enter throughout the year to populate some of your Self Assessment tax return. All you have to do is check the figures and enter the remaining information. FreeAgent then calculates your tax bill and allows you to file your completed tax return directly to HMRC.
Once you've paid your tax bill, find out how to explain a Self Assessment payment to HMRC.
We are not authorised by HMRC to provide accounting or tax advice. Therefore, FreeAgent’s Support team cannot advise you on how to fill in your tax return correctly or check your figures to see if they are correct, unless they have been calculated by the software. If you’re unsure whether a figure on your tax return is right, please speak to your accountant or to HMRC.
Self Assessment pages that are supported in FreeAgent
Sole traders can complete the following pages of the Self Assessment tax return in FreeAgent. Please note that some pages aren't supported.
Main Return
The Main Return page is where to record your personal details, sources of income such as bank interest, dividends from shares and certain tax reliefs that you may be entitled to. It’s also where to record certain charges that may apply to you, such as student loan repayments and the High Income Child Benefit Charge.
Employment
If you’re an employee of another business and you’re on the business’s payroll, the Employment page is where to report your wages and any benefits you received from the employer during the tax year. If you have more than one job, you must fill in an employment section for each job.
Self-employment
You should use the Self-employment page to report your business profits. FreeAgent can populate some of the Self-employment page with the financial data that you enter throughout the year.
UK property (SA105)
You should use the UK property page to report property income if you’re a UK resident landlord. If you have income for property outside the UK you won’t be able to report it here - unless it’s for furnished holiday lettings (FHLs) in the European Economic Area (EEA).
Tax Adjustments
The Tax Adjustments page contains an overview of your tax liability and the National Insurance contributions that you owe. Use this page to record the details of any tax adjustments that you want to make, for example applying for a reduction in your payments on account.
Self Assessment pages that are not supported in FreeAgent
The following pages of the Self Assessment tax return for sole traders are not supported in FreeAgent:
- 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 the above pages you won't be able to use FreeAgent to file your Self Assessment tax return.
Completing your Self Assessment tax return in FreeAgent
Before you get started
Make sure that you’ve explained all of your bank transactions for the tax year that you’re filing for. If you have employees, you should have either filed month 12 payroll for the tax year in question or marked month 12 as filed.
FreeAgent doesn't know exactly which pages and sections of the Self Assessment tax return apply to you and your business. It's therefore a good idea to double-check with your accountant exactly which pages you need to complete before getting started.
Finding your Self Assessment tax return in FreeAgent
Navigate to the ‘Taxes’ tab at the top of the screen and select ‘Self Assessment’ from the drop-down menu.
Select the relevant tax year from the list on the left-hand side of the panel or from the 'History' drop-down menu.
Completing the pages of your tax return
Use the tabs at the top of the return to access each page of your Self Assessment tax return.
You’ll notice that some of the boxes have already been filled in by FreeAgent based on the data that you’ve entered. You’ll need to fill in the other boxes manually. Those that are required by HMRC are indicated in FreeAgent with an orange outline. If a box isn't relevant to you and isn't required, you can leave it blank.
Choose ‘Yes’ at the start of every section that applies to you. Any sections that remain set to ‘No’ won’t be included in your tax return.
FreeAgent will automatically save the data as you enter it. If you need to complete some of the required information on a page, you’ll see an ‘In Progress’ notification indicating how many sections or questions still need to be completed.
Once you’ve entered the required information on all the relevant pages of your Self Assessment tax return, you can then file it directly to HMRC through FreeAgent.
How FreeAgent calculates your tax bill
FreeAgent uses the data in your Self Assessment tax return to calculate the amount of tax and class 4 National Insurance contributions that you owe HMRC. This figure is displayed in the panel to the right of your Self Assessment tax return in FreeAgent. Please note that any payments on account you need to make for the following tax year will not be included in this figure.
You can see a step-by-step breakdown of this calculation by selecting the ‘Your Tax Breakdown’ tab.
The information displayed in the Your Tax Breakdown area can serve as the equivalent of an SA302 form. Some mortgage providers accept this information as part of a self-employed mortgage application. You can print this information directly from FreeAgent.
There are a number of methods available for paying your tax bill to HMRC. Check out our guide to paying your tax bill to find out more.
Once you've paid your tax bill, find out how to explain a Self Assessment payment to HMRC.