January 31st 2023: Self Assessment and the Cost of Living!

It’s the New Year, and for the self-employed it’s time for THAT tax payment! With self-employment contributing £125bn to the UK economy, we talk to the FSB about what the future holds, post-31st January, and into 2023.

2023 in review with the FSB - A-Plan Insurance

Despite a boom in industry and measured optimism post-vaccine, it has still been a turbulent year for the self-employed trade! From rising business costs, trying to meet demand against material (and worker!) availability, plus the cost-of-living crisis, these ‘unprecedented times’ aren’t feeling quite so ‘unprecedented’ these days.

We spoke with Sam Holliday, Development Manager, of the FSB (Federation of Small Businesses), who played a pinnacle part in securing Government support for the self-employed during the pandemic, about what to expect post-tax payment and during 2023.

Small business outlook in 2023

Small businesses and the self-employed have had the most extraordinarily unpredictable couple of years and it would be nice to think that this period of uncertainty and instability would have gone by the time the new year arrives. However, sadly it doesn’t feel that way at the moment.

So many self-employed businesses managed to get through COVID due to their adaptation and determination. And once the vaccine finally arrived, pandemic fears subsided, which boosted small business confidence.

“Unfortunately, this year, three other unexpected factors have hit us that sent that short-lived confidence boost into reverse: the turmoil caused by the war in Ukraine, the political and economic upheaval we have seen at home, and the massive hike in costs which has seen the price of goods, utilities and staffing skyrocket. And sadly, there is no vaccine to deal with those issues.

“At FSB we have worked alongside the Government to try and reduce the cost pressure on business – and with some success! Not least in finally getting some vital energy support for SMEs – but whether it will be enough to help many of our self-employed and business owners get through a very challenging period remains to be seen.

Our focus now is encouraging the Government to do all it can to reduce the cost of doing business further, to crackdown on late payment practices that are crippling otherwise viable companies, and to create a positive atmosphere so business owners and the self-employed feel confident to start or grow a business. And let’s not forget, supporting the self-employed and small businesses to do this is not a ‘giveaway’: it is an investment in our nation’s economic recovery.”  

To find out more about the FSB and to find their social media links to monitor announcements that could affect you and your business, click here.

When is the tax deadline?

If you missed the deadline for filing a paper return (31st October), you’ll need to submit your Self-Assessment tax return online and pay any tax due by 31st January. You’ll get a bill once you’ve filed your tax return which will outline how much you owe but this could take up to 72 hours from filing your return.

The 31st January payment takes into account any tax owed for the previous year, and is known as your ‘first payment on account’. Your ‘second payment on account’ is due in July. As this bill will still incorporate SEISS grant tax repayments, some may find this payment is higher than anticipated.

We would recommend that you pay online as opposed to via post, which could see considerable delays due to the ongoing Royal Mail strikes. You will also be able to view your receipt for payment instantly as opposed to requesting one with your postal payment and waiting for it to arrive through the post.

If you cannot pay your tax bill on time, contact HMRC as soon as you can. They may be willing to apply a ‘Time to Pay’ arrangement to your account. If you are already aware that you will need extra time to pay, we would recommend contacting them now, as opposed to closer to the deadline as this is their busiest time of year. You can contact them via telephone or Webchat.

First timer: How to complete your tax return

Here’s a handy guide to get you started.

Filing and paying your Self Assessment tax return - a guide for the first timer

Need a helping hand? Don’t worry, if this is the first time you have paid self-assessment, or paid it online, HMRC have some easy-to-follow resources available online to guide you through the process. 

A-Plan continues to work with many self-employed or sole trader businesses who rely on us for our expertise and recommendations. If you would like to review your business insurances, from your van insurance to your business liability insurance, to ensure you can avoid any unnecessary financial risks over the coming year, we are here to help.