Self Assessment Responsibilities for Fundraisers
Many charity fundraisers work as freelancers, and are therefore self-employed. These individuals, along with many others with non-standard tax affairs, are required to complete a Self Assessment tax return.
The Self Assessment process is notoriously time-consuming. But by making yourself aware of your responsibilities well in advance, you can help to ensure that it is not too taxing.
Do I need to complete a Self Assessment?A wide range of people are required to complete a Self Assessment – even if they are not self employed. Broadly speaking, if you have any income from which tax has not been deducted at source, you will have to complete a Self Assessment.
Freelance fundraisers will almost certainly need to complete a Self Assessment tax return. This means that you will receive a return shortly after the end of each tax year, which you can complete online or on paper. You must give details of all taxable income over the course of the year, including benefits in kind. You must also provide information about your allowable expenses – that is, those expenditures that can be offset against tax.
Depending on when you file your Self Assessment, you will either be expected to work out how much tax you owe, or HM Revenue and Customs will do it for you. You will then have to pay that amount by the deadline.
Record keepingYou have a legal obligation to keep full and accurate records throughout the year. This means that you must keep proof of income, as well as any receipts or invoices for purchases that you intend to offset against tax. You should also keep bank statements.
As well as being a legal necessity, efficient record keeping makes your life significantly easier when it comes to completing your Self Assessment. If you have comprehensive records to hand, the process of filling in the return should not take long; or the other hand, if you have to dig through receipts in shoeboxes, you might be there for days. You should therefore consider investing in good bookkeeping software; this will enable you to simply enter the relevant totals when you come to fill in your Self Assessment.
Self Assessment deadlinesThere is a series of important deadlines during the tax year to which every Self Assessment taxpayer must adhere. Failure to do so will result in financial penalties.
You will normally be required to file your Self Assessment by 31 January if you do so online, or 31 October if you choose to use the paper method.
On 31 January you will also have to make the balancing payment for the tax year covered by that Self Assessment. In addition, you will normally be required to make the first of two ‘payments on account’ against next year’s bill. Each of these payments is equal to 50 per cent of your bill for the year just passed. The second payment on account is due on 31 July.
It is important that you keep up with your Self Assessment tax payments. If you are having trouble making payments, make sure that you contact HM Revenue and Customs as soon as possible.