If you need to declare additional income from property, capital gains, or self-employment, you’ll be required to fill out the applicable supplementary page of your tax return.
- If you’re self-employed, the SA103 is the page you should fill in.
- The SA105 is for property income.
- You should fill in the SA108 if you need to declare capital gains.
There’s also room to report any applicable expenses on your form. These expenses will be deducted, reducing your tax bill.
There may be other instances in which you need to fill out a self-assessment tax return. For example, if you’re a company director or an employee, some circumstances require you to file your taxes. You may also need to fill in a self-assessment tax return to declare foreign income or a business partnership.
If any of the above applies to you, you’ll need to fill out supplementary pages, but the exact process won’t be explained in this article. You can find more information on the GOV website.
Let’s look in more detail at the SA103, the SA105, and the SA108.
Several sections make up the SA103 for self-employed individuals:
Your first job will be to total up how much money you’re earning through self-employment and add it beneath the ‘business income’ section. Don’t deduct expenses from this total – it should represent exactly how much money you made prior to any deductions. You may need to add multiple amounts if you have multiple sources of income from self-employment. Your main employment should be the job you earn the most from.
Self-Employed Income Support Grant (SEISS)
You should fill in this next section if you have received an income support grant during this tax year. A SEISS grant isn’t classed as income. Instead, declare this grant in the “Other tax adjustments for your business trading name” section. You’ll need to include the first three grants (paid before April of the beginning of the tax year) on your tax return form. Your last two grants don’t need to be filed or paid for until the next tax year.
If you’re self-employed, you should declare your expenses on your tax return to reduce your tax bill. It’s easier to declare expenses if your annual turnover doesn’t exceed £85,000, as you won’t need to itemise each expense. If you currently claim the £1,000 tax-free trading allowance, you won’t be eligible to declare expenses.
Some of the expenses you can declare:
- Cost of work equipment
- Travel and vehicle expenses
- Expenses for work buildings (such as electricity bills, rent, and insurance)
- Staff wages and salaries
- Advertising costs
- Financial charges from banks and credit cards
- Interest on business loans
- Legal and financial service costs, including accountancy
It’s important to have a record of these expenses, not only because it will make it easier for you to declare them but also because you’ll be able to share them if HMRC asks you to produce them.
You don’t need to provide proof, but HMRC may investigate if something doesn’t look right with your expenses. You should keep records of your expenses for at least five years as a precaution.
If you rent out properties you own, the SA105 provides space for you to enter income from each property you rent. This form is divided into two sections. The first section requires information about the income generated from furnished holiday lettings in the UK (fill in this section if it applies to you). The second section should be filled in by landlords who receive rental income from other properties.
Again, if you claim the £1,000 tax-free trading allowance, you can’t declare expenses from the money you make renting out a property.
Potential expenses for landlords include:
- Money spent on maintenance and property repairs
- Ground rent and insurance fees
- Credit card or loan interest
- Fees for management and legal services
Income for Capital Gains Tax is known as disposal proceeds. The SA108 has space for declaring ‘disposal proceeds’ for:
- Residential and non-residential properties, and
- Securities and shares
There are a number of expenses you can claim for on the SA108. These expenses are known as allowable costs and include:
- The initial cost of the asset
- Expenses involving any improvements made, which can be proved when the asset is sold
- Other costs involved in selling or buying, like stamp duty
Keeping good records is essential and will prevent you from accidentally claiming twice for the same thing.