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What is a SA302 form?

If you’ve ever sat down to sort out some tax matters or tried getting a loan, you might have heard about the SA302 form. If you’re feeling a little lost, read on for our simple guide to the what, why and when of the SA302 form. 

What is the SA302?

An SA302 form is a tax calculation produced by HMRC for those who file a Self-assessment tax return. It details your income for a particular tax year and the tax that you owe or are due. Think of this as a report card that shows your tax position and explains how it was calculated. If you’ve used an accountant to complete your return, you’ll get an SA302 (also known as a Tax Calculation) on the back of the return.

Why Would I Need an SA302?

There are a few primary reasons why someone might need an SA302:

  1. Proof of Income: If you’re self-employed or have several sources of income, proving your income can be slightly more complicated than just presenting a payslip. Many lenders or financial institutions will request an SA302 as evidence of earnings.
  2. Mortgage Applications: Mortgage lenders often ask for the SA302 form as it provides a detailed breakdown of income over the tax year. It’s not uncommon for lenders to ask for SA302 forms spanning several years to gauge consistency in earnings. It gives them an idea of how much you earn, helping them decide how much they can lend you.
  3. Renting a Property: Some landlords or letting agents might request an SA302 to ensure potential tenants have a stable income.
  4. Personal Records: It’s always good practice to keep a record of your earnings and taxes paid. The SA302 is a comprehensive document that can be part of your financial records.

What’s on the SA302 Form?

The SA302 form contains:

  • Your total income for the tax year.
  • Breakdown of sources of income (e.g. from employment, property rental, dividends).
  • Total tax owed or refunded.
  • Personal Allowance and other tax adjustments.

It’s worth noting that the SA302 reflects what has been reported to HMRC. So, ensure all your income sources are declared accurately on your Self-assessment tax return.

But There’s a Catch

Here’s where things can get tricky. A tax return can be created without sending it to the tax office (HMRC). So, it’s possible to bump up the profit to make it look like you earn more than you actually do. The idea is to make lenders think you’re a safe bet.

But there’s a system in place to catch this.

Enter: The Tax Year Overview

To make sure everything’s above board, lenders also ask for another document called the Tax Year Overview. This can be obtained online by your accountant or by you if you have an HMRC account.

What’s it for? It shows your tax position with HMRC. Lenders will compare the numbers on this overview with those on the SA302. If they match up, it means the tax return was sent off with the numbers shown on the SA302, and the tax office is okay with it. The lender can then move forward.

What If Things Don’t Add Up?

If the numbers on the SA302 and the Tax Year Overview don’t match, it could cause problems. There might be different reasons for this mismatch, and lenders might stop everything until it’s sorted out. They just want to be sure they have the right information.

How to Get Your SA302 Tax Calculation

You can get evidence of your earnings (your SA302) once you’ve submitted your Self-Assessment tax return. You can also get a tax year overview for any year. To access both, log in to your HMRC online account, go to ‘Self-Assessment’, then ‘More Self-Assessment details’. If you or your accountant use commercial software to do your return, you’ll need to use that software to print your tax calculation. It might be called something different in the software – for example, ‘tax computation’.

If you’ve used an accountant to handle your tax affairs, they can obtain and provide you with the SA302 form.

In Short

The SA302 is basically a snapshot of your tax situation. When teamed up with the Tax Year Overview, it makes sure everything is transparent and above board.

If all this tax talk is making your head spin, don’t hesitate to get in touch for help. It’s always better to be in the know, especially when money is involved.

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What Your Accountant Needs To File Your Individual Tax Return

Filing a tax return isn’t everybody’s idea of fun. But you must get it right and filed on time. While it can seem like a tedious task, you can choose to use an accountant to file your tax return if you don’t have time to do it yourself, you have complex financial arrangements, or you want to make sure that you’re taking advantage of all of the deductions and credits that you’re eligible for. That means you’re not tied up with tax and are free to spend time on the things you’d rather be doing.

If you choose to use an accountant, they’ll need a variety of information from you to file your tax return. This information will help them determine your taxable income and calculate your tax liability. And, perhaps most importantly, show you how to reduce your tax bill. 

Read on for a comprehensive guide to what your accountant needs from you to file your tax return successfully. From essential documents and financial records to specific details about your income and expenses, we’ll walk you through the key information that will enable your accountant to prepare your taxes accurately, maximise deductions, and minimise your tax liability. 

Information About You and Your Income

Identification information: Your accountant will need your name, address, National Insurance number, and date of birth. They may also need the identification information for your spouse and dependents.

Copy of your most recent tax return: This will help your accountant determine your filing status, income and deductions from previous years, and any credits you may be eligible for.

Wage statements: If you have any employment income on top of your self-employed earnings, you’ll need to provide your accountant with your wage statements from your employer(s). These statements will show your gross income, deductions, and your tax withholding. You’ll also need to provide your P60, or P45 if that employment income ceased during the year, together with your P11d, which outlines any benefits in kind you received from your employment.

Additional income statements: If you have any other sources of income, such as rental income, or investment income, you’ll need to provide your accountant with statements showing this. You must include any bank interest, dividends, and savings interest received during the year (excluding ISAs).  

Particulars of your rental property If you own property, you’ll need to provide your accountant with documents showing your rental income, mortgage interest, property taxes, and all expenses relating to the property. These include statements from your letting agent if you use one. Whilst previously there was mortgage rate relief, since April 2020, all buy-to-let landlords must pay tax on the entirety of their rental income. However, they can receive a tax credit worth 20% of their mortgage interest rates.

Private pension payments: You’ll need to supply details of any pension payments you’ve made in the previous year, as these can give you additional tax relief if you qualify.

Information About Your Business

All sales income: You’ll need to provide all your sales invoices for the year or details outlining your daily takings if, for example, you’re a shop that doesn’t issue invoices. One question we are often asked is whether you need to provide invoices that haven’t yet been paid. The short answer is yes; you must provide all the invoices issued in the given tax year. 

Proof of expenses: If you’re claiming any deductions or credits, you’ll need to provide your accountant with proof of these expenses. This proof could include receipts, invoices, or other documentation.

Bank statements: Providing bank statements for your business allows your accountant to cross-check everything going in and coming out and acts as evidence of these. While you may only have one business bank account, if you have a deposit account or reserve account, make sure to include these statements too.

Business credit card: You might put everything for your business on a business credit card, and you’ll need to give your accountant these statements. If you occasionally use a personal card to pay business expenses, include these with the business-related costs highlighted. 

Loan statements: If you have any business loans, your accountant will need to see the statements. This will mean that the closing balance is included in the accounts correctly and that the correct amount of interest has been included as a deductible expense.

Finance agreements: Provide copies of any new finance agreement contracts signed in the past year. The interest on the payments is tax-deductible, and the asset bought could qualify for the annual investment or other capital allowances.

Petty cash receipts: If your business carries cash, your accountant will need to know how much money is in cash at the end of the year. They need to balance your money, so these records are very important.

Payroll records: Your accountant may operate your payroll, but if not, you’ll need to supply copies of each month’s pay run. This is so your accountant can check to ensure all wage and national insurance amounts are included.

Stock value: If relevant, you must supply a valuation of any stock held at the year-end. This should include information about what it costs, or its value if lower.

Making Tax Digital

In the past, all information was sent to accountants on paper, which, unsurprisingly, was difficult to keep track of. Things would be lost, and a lot of time wasted. Most information can now be supplied online, and as we move closer to Making Tax Digital, you should consider moving to online bookkeeping software. This will automatically organise your records and keep them all in one place. As a result, you won’t need to worry about missing anything, and it also means you can give your accountant access to your online records throughout the year. 

At Norwich Accountancy, we offer clients access to and full training on Xero, the online cloud-based accounting software for small and medium-sized businesses.  

All in the timing 

The deadline for sending your online self-assessment tax returns to HMRC and paying any taxes owed is 31st January each year for the previous tax year. So, on the 31st of January 2024, you’ll have submitted all your information for the tax year from the 6th of April 2022 to the 5th of April 2023. 

If you have chosen to use an accountant to file your taxes, getting everything in order well ahead of these deadlines will give you plenty of time to plan for any tax liabilities. If you need help completing your tax return, get in touch or contact us online here. After all, we’re all about tax returns, stress deducted.