Annual Accounts, Self-Assessment, PAYE Filing Guide: What Do You Actually Need?

Annual Accounts, Self-Assessment, PAYE: Your Complete Filing Guide for 2025

Over 12 million people in the UK file Self-Assessment tax returns annually. Millions of UK businesses submit Annual Accounts to Companies House. Yet, many still overpay taxes or face penalties due to confusion.

• Why read this?

  • Penalties start at £100 for late Self-Assessment filings.

  • PAYE errors can lead to HMRC investigations.

  • Annual Accounts mistakes risk fines up to £1,500.'

    
    

• Who is this for?

  • Self-employed individuals.

  • Limited company directors.

  • Employees with side income.

  • Employers managing payroll.

    
    

This Annual Accounts Self-Assessment PAYE filing guide clarifies exactly what you need to file, key deadlines, and how to avoid costly errors.

What Are Annual Accounts, and Who Needs to File Them?

Annual Accounts are financial statements showing your company’s performance over a year. They’re legally required for most businesses to ensure transparency with HMRC and Companies House.

Who must file Annual Accounts?

• Limited companies (even dormant ones).

• Limited Liability Partnerships (LLPs).

• Unregistered businesses with significant turnover (rare cases).

  
  

What’s included?

• Balance sheet: Assets, liabilities, and equity.

• Profit and loss account: Revenue, costs, and net profit.

• Director’s report: Business overview and risks (if applicable).

• Notes: Accounting policies and explanations.

  
  

Deadlines you can’t miss:

• Private companies: 9 months after your financial year-end.

• Public companies: 6 months after your financial year-end.

  
  

Common mistakes to avoid:

• Missing deadlines (fines start at £150).

• Incorrect profit calculations (use accrual or cash basis correctly).

• Omitting director loans (report loans over £10,000).

Self-Assessment: Who Must File and Why?

Self-Assessment tax returns ensure you pay the right Income Tax and National Insurance. Here’s who must file and why:

Who needs to file?

• Self-employed individuals earning over £1,000 (before expenses).

• Business partners in partnerships.

• Landlords with rental income over £2,500 (or £1,000 to £2,500 if untaxed).

• Employees with untaxed income (e.g., freelancing, dividends, tips).

• High earners (over £50,000) owing the High-Income Child Benefit Charge.

• Capital Gains Taxpayers (e.g., selling property or shares).

Voluntary filing applies if:

• You want to claim tax reliefs (e.g., pension contributions, charitable donations).

• You need to prove self-employment status for benefits or loans.

• You’re topping up National Insurance contributions for state pension eligibility.

Key deadlines:

• Register by 5 October after the tax year ends.

• File paper returns by 31 October.

• File online returns by 31 January.

• Pay owed tax by 31 January (plus 31 July for payment on account).

Common pitfalls:

• Missing registration deadlines (you can’t file without a UTR number).

• Underreporting income (HMRC cross-checks bank/P60 data).

• Overlooking allowable expenses (e.g., home office costs, mileage).

PAYE: What Employees and Employers Need to Know?

The PAYE system deducts tax and National Insurance automatically from wages or pensions. Here’s what you need to do:

For employees:

• When PAYE covers everything:

  • You have one job with no additional income.

  • Your employer deducts tax correctly through payroll.

    
    

• When you still need to file Self-Assessment:

  • You earn £100,000+ annually.

  • You have untaxed income (rentals, dividends, freelancing).

  • You owe High Income Child Benefit Charge (income over £50,000).

For employers:

• Operate payroll accurately:

  • Deduct Income Tax and National Insurance.

  • Report pays and deductions via Real Time Information (RTI) before payday.

    
    

• Handle pensions and benefits:

  • Enroll eligible staff into a workplace pension.

  • Report taxable benefits (e.g., company cars, health insurance).

    
    

• Submit to HMRC:

  • Full Payment Submission (FPS) each payday.

  • Employer Payment Summary (EPS) if no payments are made.

Key deadlines:

• PAYE payments to HMRC:

  • 22nd of the month (if paying electronically).

  • 19th of the month (if paying by post).

    
    

• RTI submissions: On or before each payday.

Avoid these mistakes:

• Late RTI submissions (fines start at £100/month).

• Incorrect tax codes (verify employee starter details).

• Missing pension contributions (auto-enrolment compliance is mandatory).

Key Information You’ll Need to Prepare

Stay ahead by gathering these documents for each requirement:

For Self-Assessment:

• UTR number (Unique Taxpayer Reference).

• Government Gateway login (register early to avoid delays).

  
  

• Income records:

  • P60s, P45s, and invoices.

  • Dividend vouchers, rental income statements, and freelance earnings.

    
    

• Expense proofs:

  • Receipts for office supplies, travel, and professional fees.

  • Mileage logs (45p per mile for cars, 24p for motorcycles).

    
    

• Pension contributions:

  • Annual statements from providers.

  • Details of voluntary National Insurance top-ups.

For Annual Accounts:

• Bank statements (business accounts only).

• Sales and purchase invoices (categorized by month).

• Payroll records:

  • Employee salaries, pensions, and benefits.

  • Subcontractor payments (CIS deductions if applicable).

• Previous year’s accounts (for comparative figures).

For PAYE:

• Employee details:

  • Full names, addresses, and NI numbers.

  • Starter declarations (confirm tax codes and employment status).

• Payroll data:

  • Hours worked, overtime, and bonuses.

  • Statutory payments (maternity, sick pay).

• Pension auto-enrolment records:

  • Opt-in/opt-out forms.

  • Contribution percentages and payment dates.

Pro tip: Use digital accounting software (e.g., FreeAgent, QuickBooks) to track everything in real time.

What Expenses Can You Actually Claim?

Maximize deductions and reduce your tax bill with these legitimate expenses:

Allowable expenses for Self-Assessment (self-employed/sole traders):

• Office costs:

  • Stationery, printer ink, postage.

  • Software subscriptions (e.g., accounting tools, design apps).

    
    

• Travel:

  • Mileage (45p per mile for cars, 24p for motorcycles).

  • Train fares, parking, and congestion charges.

    
    

• Staff costs:

  • Wages, pensions, and agency fees.

  • Subcontractor invoices (with CIS deductions if applicable).

    
    

• Home office:

  • Proportion of rent, utilities, and internet (based on workspace size).

  • Simplified flat rate: £6/week (no receipts needed).

    
    

• Professional services:

  • Accountant fees, legal advice, and trade memberships.

    
    

• Marketing:

  • Website hosting, social media ads, and business cards.

    
    

• Financial costs:

  • Bank charges and interest on business loans.

Limited company directors:

• Business travel (not commuting).

• Client entertainment (no personal benefit).

• Training courses directly related to your work.

• Company pension contributions (tax-free for employers).

Employees (through Self-Assessment):

• Professional subscriptions (e.g., nursing licenses, teaching memberships).

• Uniforms/workwear (if branded or required for safety).

• Home office costs (if not reimbursed by your employer).

What you can’t claim:

• Personal groceries or clothing (unless PPE or branded uniforms).

• Commuting costs (home to permanent workplace).

• Fines or penalties (e.g., parking tickets).

Pro tip: Use cash basis accounting (turnover under £150k) to simplify expense tracking.

Deadlines You Cannot Miss:

Task	Deadline
Register for Self-Assessment	5 October (after tax year ends)
Submit paper tax return	31 October
Submit online tax return	31 January
Pay Self-Assessment tax	31 January (and 31 July for second payment on account)
File Annual Accounts	9 months after company year-end
PAYE monthly submissions	On or before each payday
PAYE payments to HMRC	22nd of the month (electronic) / 19th (post)
VAT returns (if applicable)	1 month + 7 days after accounting period ends

Note:

• Late Self-Assessment filings trigger immediate £100 penalties.

• Annual Accounts delays result in fines up to £1,500 for private companies.

• PAYE late payments accrue interest + penalties (based on employee numbers).

Special Cases to Watch Out For:

Avoid surprises by understanding these unique scenarios:

1. Student loan repayments through Self-Assessment:

• Plan 1/Plan 4 loans: Repay 9% of income over £22,015 (2024–25).

• Plan 2 loans: Repay 9% of income over £27,295 (2024–25).

• Plan 5 loans: Repay 9% of income over £25,000 (2024–25).

• Report loan repayments manually if not deducted via PAYE.

2. Overseas income or residency:

• Taxable if UK resident: Report foreign income (rentals, dividends).

• Double Taxation Relief: Claim if taxed abroad (use DTAs).

• Statutory Residence Test: Prove non-residency to exclude income.

3. Business closure or sale:

• Final Self-Assessment: File within 12 months of closure.

• Capital Gains Tax: Apply if selling business assets.

• VAT cancellation: Notify HMRC within 30 days.

4. Multiple jobs or side hustles:

• Emergency tax codes: Likely on second job (check P60s).

• Separate records: Track income/expenses for each venture.

5. Making Tax Digital (MTD):

• MTD for Income Tax: Required from April 2026 (self-employed/landlords with £50k+ income).

• Digital records: Use MTD-compatible software (e.g., FreeAgent).

6. High Income Child Benefit Charge (HICBC):

• Income over £50k: Repay 1% of benefit for every £100 earned above £50k.

• Income over £60k: Repay 100% of benefit received.

Pro tip: Notify HMRC immediately if your circumstances change (e.g., moving abroad, starting a new business).

Practical Tips to Stay Organized

Simplify tax compliance with these actionable steps:

1. Calendar reminders for deadlines:

• Set alerts for key dates (Self-Assessment, Annual Accounts, PAYE).

• Add buffer time: Submit 1 week early to avoid last-minute errors.

2. Use accounting software:

• FreeAgent/Xero: Track income/expenses, generate reports.

• HMRC-recognized tools: QuickBooks, Sage for MTD compliance.

• Auto-sync bank feeds: Reduce manual data entry.

  
  

3. Record-keeping systems:

• Digital folders: Label by tax year (e.g., "2024–25 Receipts").

• Physical files: Store bank statements, P60s, and invoices for 6 years.

• Expense apps: Snap receipts via Dext, Receipt Bank.

4. Quarterly reviews:

• Reconcile accounts: Match bank statements to software entries.

• Check tax estimates: Adjust payments on account if earnings change.

5. Work with professionals:

• Accountant checks: Book mid-year reviews to catch errors early.

• Payroll services: Outsource RTI submissions to avoid penalties.

6. Employee/contractor management:

• Starter checklists: Collect NI numbers, tax codes, and pension details upfront.

• CIS compliance: Verify subcontractor status and deduct 20%/30% if needed.

7. Tax-efficient planning:

• Pension contributions: Reduce taxable income (up to £60k annually).

• Claim all reliefs: Use trivial benefits (£50/month tax-free perks for staff).

Pro tip: Backup data weekly to cloud storage (e.g., Google Drive, Dropbox) in case of device failure.

Conclusion: Know Your Requirements, Protect Your Finances

Staying compliant with Annual Accounts, Self-Assessment, and PAYE isn’t just about avoiding penalties-it’s about taking control of your financial health.

Key Takeaways:

• File early: Beat deadlines to reduce stress and errors.

• Claim every penny: Track expenses meticulously to lower tax bills.

• Use technology: Automate record-keeping with accounting software.

• Seek help: Consult professionals for complex cases (e.g., overseas income, MTD).

Final Step: Review your obligations today-whether you’re self-employed, a business owner, or an employee with side income. The right preparation saves money, time, and headaches.

If in doubt, act now: Visit GOV.UK for official guidance!

Considering the bigger picture?

Discover how strategic tax planning can significantly impact your business growth in our latest article: Real Results: The Impact of Strategic Tax Planning on Business Growth.

Need expert help?

Speak to AMS today to get personalized support for Self-Assessment, Annual Accounts, and PAYE filing — and stay one step ahead!