A tutors' guide to self-assessment tax
What is self-assessment?
Self Assessment is a system that HM Revenue and Customs’ (HMRC) uses to collect Income Tax. All those that meet the criteria for self-assessment tax will need to complete a tax return.
Do you need to complete a self-assessment tax return?
Most taxpayers in the UK are taxed at source and so do not need to complete a Self Assessment Tax Return. ‘Taxed at source’ means that the money you receive has already had tax taken off, such as the wages you get from your employer when paid under the Pay As You Earn (PAYE) system, or UK bank interest taxed at source. As a private tutor, you will be in receipt of 'gross' or untaxed income, which must be declared to HM Revenue & Customs on a self-assessment tax return. You can also deduct from this income any business related expenses to help reduce your tax liability. Please see our guide what expenses can tutors claim, for more details on this.
Other tax guides for Tutors
Registering for Self-Assessment
Your earnings as a tutor are classed as self-employment income and you will therefore need to register with HMRC as self-employed and also register for Class 2 National Insurance. You are required to inform HM Revenue & Customs about your self-employed status within 6 months of the end of the tax year in which the income is received (that is by 5 October following the end of the tax year). HMRC will then send a tax return for you to complete. Failure to notify HMRC and register as self-employed within the deadline can result in a penalty from HMRC of £100. As part of the fee, we will deal with the entire registration process for you.
What happens if you fail to submit your tax return on time?
Even if your income from private tutoring was relatively low during a tax year, you are still legally obligated to declare this income, no matter how small, to HMRC on a self-assessment tax return. Failure to submit your tax return on time will result in a fixed late filing penalty of £100 being imposed. If your tax return remains outstanding, HMRC will impose further penalties with the total penalties amounting to £1,600 after 12 months. Please see our guide on key tax dates and deadlines for Tutors, for further advice on when and what you should do in order to stay on the right side of HMRC.
For a small fixed fee each year, we can prepare your tax return and ensure that you remain on the right side of HM Revenue & Customs at all times!
We have prepared the following tax guides specifically for Tutors and the self-employed. Click on the links to read more:
Tax Guides for Tutors (subscribers only)
Need help with anything else?
There's more to us than just tax returns. Visit our website for details on our tax services: