Do I need to file a tax return?

Whether you are a freelancer, are working on a platform such as Uber, Deliveroo, Etsy, or have a side hustle ... once you earn over £1,000 in a year, you need to register with HMRC (the UK tax authority) and file a tax return each year. It can also be called 'self-assessment'. untied can help you do it - quickly and easily.

What if I'm also employed?

You can be both employed and self-employed. When you're employed and get a payslip, your employer deducts the tax you have to pay.

Even if you're also employed, if you're earning more than £1,000 through self-employment, you have the responsibility to report all your income and pay taxes to HMRC.

What tax do self-employed people pay?

You'll be paying two types of tax as you earn

- Income tax applies to what you earn from work, investments, and property, etc
- National insurance applies to earnings from work. Over your career, your national insurance contributions build up your eligibility for a state pension

You may also be repaying student loans.

untied takes care of the tax calculations, giving you real-time updates of what you owe as you earn. When you submit your return, HMRC will send you an actual statement of what you need to pay and when. 

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How much tax do I need to pay?

The amount of tax you need to pay is based on how much you earn. Have a look at our page on "How much tax will I pay?"

For Income Tax, everyone has a personal allowance, which is the amount they can earn without paying tax.  For most people, this is £12,570 in tax years 2021/22 & 2022/23. After your personal allowance, your earnings between £12,571 and £50,270 are taxed at 20%. After that, the tax rates increase.

If self-employment is your only source of income, you can make up to £12,570 before you need to start paying Income Tax (but National Insurance needs to be paid by most people with self-employment income above around £6,500).

If you’re making over £1,000 from your self-employment though, you’ll still need to register with HMRC (the UK’s tax authorities) and file a self-assessment tax return, even if you may have no tax to pay because you earned less than the personal allowance.

You may also have to pay tax on other earnings – such as if you sell cryptocurrency or stocks and shares that have increased in value, if you rent out a property, or if you earn a lot from interest and dividends. 


How can I register with HMRC?

You can use untied to register with HMRC. You'll then get a UTR (Unique Taxpayer Reference) number (which is 10 digits long) which you can enter in untied.

We recommend that you register when you start working as self-employed and are confident you'll be earning more than £1,000 in one tax year.

If you're leaving it late, the deadline is 5 October after the tax year you started working.

How do I do my tax return?

There are a few ways to get your tax return done:

- You can use untied, the quickest and easiest way. We'll guide you through the process and it can all be done on your mobile!
- You can gather all the data and fill in the forms directly on HMRC's website
- If you have an accountant or bookkeeper, you use untied to help them help you. They'll find it quicker and easier to support you. Do tell them about our accountant portal.

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3 Submit your tax return

When do I need to file a tax return?

A tax year runs from 6 April to 5 April. We call the tax year that ran from 6 April 2021 to 5 April 2022 the 2021/22 tax year.

The deadline for submitting your self-assessment and paying any tax owed for 2021/2022 is 31 January 2023.

What does untied do?

untied is the UK's personal tax app. We help make taxes quick and easy for thousands of self-employed people like you. untied is the best way to keep track of what you owe when you owe it, and most importantly, how much you can save. untied is also on hand to answer questions with our five-star service.

untied has two different options––untied lite for manual entry, and untied Pro, which is a fully-featured tax app that syncs your transactions and logs your mileage automatically. When it comes to filing your tax return, you can do that directly from untied.

untied is easy to use and you don't need an accountant, which means untied helps you save money, time, and effort, allowing you to get on with more important things. Of course, some users still will want an accountant, especially for the tricky questions, in which case they may want to use untied's accountant portal.

Users are always giving feedback to untied that it's the fastest and best value way of getting your taxes done. Give untied a try today! 

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1.Income Income

What income is taxable?

Most earned income is taxable meaning that you will need to declare it to HMRC. All this can be done in untied.

For example, if in addition to your courier or delivery income , you make money from:
  - Trading stocks, shares or cryptocurrency
  - Renting a property or a spare room

then you may need to pay tax on any of those profits too.

If you’re unsure whether income is taxable – send the untied team a quick message at team@untied.io

Do I need to do a separate tax return for two sources of income?

You only need to do one tax return, no matter how many sources of income you have.

Normally you would combine all your self-employment together - for instance if you did some work as an IT developer and as a designer, this would be reported together.

If you are employed and also have self-employment income, both must be included on your tax return. untied takes care of all that for you.

What if I make less than the personal allowance (£12,570)?

If you made over £1,000, you need to make sure you're registered with HMRC and do a tax return, even if you made less than the personal allowance.

Remember there are two types of tax - if you made under the personal allowance of £12,570, you won’t need to pay any income tax, but you’ll still need to do a tax return.

The threshold for the other type of tax - national insurance - is lower. One type of national insurance kicks in at just over £6,500 and is also calculated when you submit your tax return.

Are COVID grants (SEISS) taxable?

Yes, the Self-Employment Income Support Scheme (SEISS) grants paid out by HMRC are taxable. They need to be treated as taxable business income in the tax year they were received.

We’ve built COVID support functionality into untied that you can read about here. Our untied Pro app even has a special tag for this type of income.

2. ExpensesExpenses

What are expenses?

As a self-employed, you may have some business costs when at work.

Expenses are any business costs associated with what you're earning from self-employment. These expenses can be deducted from your overall income, so you can reduce the tax on your overall profit.

Some things cannot be deducted - such as clothing (unless it's a uniform or carries your logo), and your lunch.

For the cost of a vehicle you use for self-employment, you would usually claim mileage (see below).

What can I claim as expenses?

You can claim expenses like:
  - Your untied subscription

  - Mileage (different rates apply for different types of vehicle, but untied calculates all that automatically for you)
  - Parking fees (but not parking tickets)

  - Business insurance(s)
  - IT equipment
  - A share of home costs for working from home (untied has a wizard to work these out)
  - Mobile phone and any data (adjusted for any private use)
  - Any other expenses incurred "wholly and exclusively" for your self-employment

What can’t I claim?

What you can’t claim for:
  - Food
  - Everyday clothes
  - Self-assessment tax penalties and interest (but untied helps you avoid these!)

Also, the tax you pay is not a business expense.



How do I claim mileage?

Many people are unaware of how much money they can save by deducting their mileage from their tax bill. HMRC gives you an allowance for how much you can claim per mile you travel.

You can claim money from your mileage if you use a bicycle, motorbike or a car for your business.

The current business rate mileage is between 20p and 45p per mile, depending on what vehicle you used.

But you don't need to worry about what rate to use as untied takes care of that automatically! untied Pro logs your journeys in the background. It means that when you come to do your tax return, we can calculate how much you’ve saved automatically.

Can you claim mileage on a bicycle?

Yes! untied applies bike mileage at a rate of 20p a mile - which is the same one that HMRC allow for employees. We believe this is a fair reflection of the cost of running a bicycle.

untied Pro and lite will ask you what mode of transport you used to deliver orders and help you work out exactly how much you can save.

Can I claim mileage on an e-bike?

There are special rules that determine whether an electric bike or e-bike is treated as a bicycle or a motorcycle. You can claim mileage, but there are some specific rules around the rates you can get.

You'll need to know if it's an "EAPC" or not - an electrically assisted pedal cycle.

An EAPC is like a bicycle for tax purposes.

An non-EAPC is like a motorcycle or moped for tax purposes. It will also need to be registered and taxed, and you’ll need a driving licence to ride it. You’ll therefore probably already know if your e-bike is an EAPC or not!

Want more on whether your e-bike is an EAPC? Does it have:
  - pedals that can be used to propel it
  - a maximum power output of 250 watts
  - a maximum speed of 15.5mph

If you tick all three, it's an EAPC and a bicycle for tax purposes.

Otherwise it’s not an EAPC and is classed as a motorcycle or moped for tax purposes. The tax rules for motorcycles will apply, which means that untied will apply mileage at 24p a mile.

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4. untieduntied

What does untied do?

untied helps you take care of your taxes from gathering data through to submission.

Lots of things happen automatically – meaning that you can keep track of what you owe, when you owe it and most importantly, how much you can save.

We also know that people do have questions, so we have five star service on hand if you need it.

How does untied work?

untied has two plans – untied lite and untied Pro.

untied lite allows you to input information, directly from your payslips and manually calculate your expenses. You can also enter the miles you've travelled. The software will then calculate the tax you need to pay, based on that information and you can submit your tax return. You can see a walkthrough of untied lite here.

untied Pro links to your bank accounts, so you can tag your income and expenses as they happen – you can even add your receipts. The untied Pro app can also log your mileage automatically whilst you're riding, so that you don't have to write down all the miles or track them on a spreadsheet, saving you time––and don't forget those miles turn into more tax savings for you. You can see untied Pro in action here.

Does untied allow me to add my employment and other sources of income.

Yes. We let you easily add income earned from employment too.

Your employer will provide you with a P60/P45 form, and we'll show you where to enter that information in untied.

untied also supports income from property and investments - and even if you're non-resident.

Can I use untied on my phone and computer?

Yes, absolutely.

untied lite can be accessed from your mobile browser or on your computer.

untied Pro has its own mobile app available on iOS and Android, but it can also be used in your computer's browser.

Can untied help me amend a tax return from a previous year?

Sure - you can amend your tax return with HMRC, even after this has been sent. HMRC gives you 12 months to amend your tax return, so you can make changes to your 2020/21 tax return until 31 January 2023 and make amendments to your 2021/22 tax return until 31 January 2024, even after its been sent to HMRC.

You can do this all easily via untied. See our article here for details how!

Can untied log my mileage?

untied Pro can log your journeys in the background whilst you work.

Why not just use HMRC?

You can, but make sure you have all the necessary records and information and a lot of time.

The most basic HMRC self-employment tax return runs to ten pages and has nearly 150 boxes for information – our estimates suggest it can take around seven hours to pull all the information together and enter it manually. 

If you’re using untied we only capture the information that is relevant to your personal circumstances and we send all the data that's needed to HMRC, so you don’t have to worry.

We also take care of any questions along the way and find ways to help you save on your tax return.

For more help see our support page or send the untied team a quick message at team@untied.io