Self Assessment for Private Practitioners
by Lindsay Roadnight
last updated: 06/01/2022
If you earn any income through private practice, you need to be registered for Self Assessment with HMRC. Registering for Self Assessment is free and simply registering shouldn’t affect any other income or benefits.
When you register for Self Assessment, HMRC will issue you with a UTR (unique Taxpayer Reference). Whilst the sign up process is usually done online, be aware that HMRC will normally send out a confirmation code to your home address by post which can take up to 10 working days to arrive.
Once you have your UTR you can sign in to your online HMRC account, this will allow you to complete and submit an electronic Self Assessment.
Self Assessment follows the Tax Year, which means each year runs from 6th April through to 5th April. The deadline for submitting your self assessment return is 9 months after the end of the tax year.
|Tax Year||Start Date||End Date||Self Assessment Submission Date|
|2020 / 2021||6th April 2020||5th April 2021||31st January 2022|
|2021 / 2022||6th April 2021||5th April 2022||31st January 2023|
Note that you can complete your self assessment anytime between the end of the tax year (5th April) and the submission deadline (31st January).
Self Assessment Sections
Self Assessment is completed in various sections, which sections you need to complete will depend on your circumstances. You do not have to complete your SA in one sitting, you can enter details, save your progress and return to it at a later time.
When you log into your self assessment account, the first section you will be asked to complete is the Tailor Your Return section. This is where you tell HMRC about your income streams. HMRC will ask about the following categories:
- PAYE Employments / Directorships
- Self Employment
- Property Income
- Foreign Income
- Disposal of Chargeable Assets (Capital Gains tax)
If you have earned any income through PAYE in the relevant tax year, you should enter the number of employments and the name of your employer(s) in this section.
If you run your private practice as a limited company, you are a director (& employee) of that company and you should enter the details in this section.
If you run your private practice as a sole trader, your income is classified as self employed income. You are allowed to earn up to £1,000 tax free through self employment each tax year. Note, this figure is for income (not profit) and if you run multiple sole trader businesses, you cannot multiple the allowance.
A Partnership is similar to a sole trader, but for more than one person. Partnerships need to be registered with HMRC and the partnership needs to complete a tax return for each tax year. If you are a member of a Partnership, you need to declare any income you received from the Partnership in this section of your self assessment.
Completing Your Return
Once you have completed the ‘Tailor Your Return’ section, you can then continue to enter your details in the relevant sections.
For each employment / directorship you held in the relevant tax year, you will need to enter the details of the income received as well as any deductions (such as tax / NI) that were taken at source. You will normally find these details on your P60 (of your P45 if you left the employment in the tax year).
For any directorships, you will also need to enter the details of any dividends you received from the company.
If you selected that you earned more than £1,000 income from self employment in the relevant tax year, you will need to enter the total income and allowable expenses for each sole trader business. Your taxable income is your profits which is income less allowable expenses.
You need to confirm the income received from each partnership you are a member of.
Your Tax Liability
Once you have completed each section, HMRC will calculate your current tax liability for the tax year. Essentially, your tax is calculated against your total gross income and then any tax / NI contributions already paid are deducted, leaving your outstanding tax liability.