How to Complete The Short Tax Return Form (SA200)

Updated 1 September 2020

The short tax return form (SA200) is issued by HMRC if you are self-employed and your affairs are simple. It requires less information from you when it comes to declaring your self-employment earnings making filling in your tax return quicker and easier.

HMRC will let you fill it in if your business turnover was less than £85,000 during the tax year for the self assessment return you are completing.

If your business turnover was less than £1,000 you still have the option to go back to the tailor your return section and choose to take advantage of the trading income allowance and avoid filling this part of your self-assessment.

Completing the SA200 Short Form Tax Return

You’ll need information on your business income and expenses to help you fill out this form:

Details About Your Self-Employment

You’ll be faced with a number of questions so HMRC can learn a little more about what you do in your business and the types of claims you’ll be making. You’ll be faced with another series of questions, here’s a bit more about them to help you answer them:

I am a foster carer or adult placement carer

Tick the box if you were a qualified foster carer (this doesn’t apply if you have a private arrangement). Then answer the rest of the questions and read the information in this post:

Self-Assessment Tax Return for Foster Carers

I wish to make an adjustment to my profits chargeable to Class 4 NICs

There are some very special circumstances that mean a self-employed individual can reduce the amount of Class 4 national insurance they pay, usually because they are:

  • Changing accounting period
  • Making cash basis adjustments
  • Relieving certain trading losses from earlier tax years
  • Want to reduce what they pay due to being employed and self-employed
  • Claiming relief for interest paid for the purpose of your business but not claimed in your return for this year or any earlier years.

I am a farmer, market gardener or a creator of literary or artistic works and I wish to claim averaging adjustment

In certain industries, people can receive up-front sums of money, like a writer who receives an advance for writing a new book. These people can claim a relief to spread this income out over one or two tax years, to help even out their tax bill. This is known as an “averaging adjustment” so tick this box if you wish to claim this.

I am a practicing barrister

Barristers must be careful when claiming certain expenses and the income they need to declare.

I have changed my accounting date

If you filed a tax return last year, you can choose to declare your figures for a different time period in this return. A change in accounting date can mean you end up getting taxed twice for the same accounting period. This is known as overlap profits and, although you can claim overlap relief, at a later date to get back your tax, you may not want to create a high tax bill that you have to pay now.

The results of my accounts, made up to a date in the year to 5 April 2019, have been declared on a previous return

Select this box if you provided information about this year’s profits on last year’s return.

My ‘basis period’ (the self-employed period for which I am taxable) is not the same as my accounting period

The basis period generally just means the tax year (6 April to 5 April). If you have filed a tax year before then you should check what accounting period you used previously and whether your accounting period matches the basis period.

If you are new to self-employment, then choosing an accounting period then ends either on 5 April or 31 March will make your self assessment easier to handle and avoid you getting double-taxed in your first year.

I provide my services under contracts for professional or other services and these contracts span my accounting date

If you have service contracts with your clients, then there are special rules you need to follow around how you calculate your turnover. Especially if you are only partway through your contractual obligations.

My business is carried on abroad 

If your business is carried out overseas, then you may only have to pay tax on certain income you have earned.

I wish to claim ‘overlap relief’

You can claim overlap relief if you’ve sold or closed down your business, or changed your accounting date this year resulting in a change of basis period, and that basis period is now more than 12 months long. You’ll only be able to claim this if you have already recorded overlap profits in a previous self-assessment return. So if you are new to self-employment then this won’t affect you.

My total turnover is £1,000 or less from all self-employments but I wish to voluntarily pay Class 2 NICs.  

Paying voluntary Class 2 national insurance helps to protect your ability to claim state benefits like the new state pension or maternity allowance.

Even if your turnover is less than £1,000 you can choose to claim the trading allowance, but still pay Class 2 National Insurance, so this is where you let HMRC know you want to do this.

My total turnover is £1,000 or less from all self-employments but I wish to claim back tax deducted under the Construction Industry Scheme (CIS). 

If you are a registered CIS subcontractor but your turnover is no more than £1,000, you can choose to complete the self-employment section to claim back tax deducted under the Construction Industry Scheme (CIS).

My total turnover is £1,000 or less and I have made a loss. 

If you choose to claim the trading allowance because your business turnover was £1,000 or less, you will not be able to claim any business expenses. But if you have paid for costs to set yourself up then you can record a tax loss on your tax return to use against future profits by filling out the self-employment section of your tax return.

I want to declare disguised remuneration income

Disguised remuneration is income earned under tax avoidance schemes using things like loans to avoid paying income tax and national insurance.

Accounting Date Used

Your accounting date will normally be 12 months long unless you are new or are stopping self-employment. HMRC want to know so they understand what period the figures you have entered for your self-assessment.

If you are new to self-employment then choose the date you wish to use as your accounting period this year and future ones. Choosing a period that matches the tax year is normally easier and if you choose something different or change your accounting period at a later date, you run the risk over overlap profits which means a tax overpayment.

Did you use the cash basis?

The cash basis means you can record your income and expenses according to what you received and pay during your accounting period. It can simplify reporting and speed up filling out your tax return but it isn’t always suitable.

If you used the cash basis for your tax return last year, then you can continue to use it this year. But you do have the option to change it.

Cash Basis for Self-Assessment

Self-Employment Income

tax return self-employment section

Turnover

Your business turnover is made up of your total sales, takings, fees and any other money you earned during your accounting period. Enter the figure for your total business turnover during your accounting period. If you use the cash basis, that will mean everything you have been paid.

If you use traditional method, it’ll include everything that is due to you during the accounting period, whether you were paid or not.

Any Other Business Income Not Included in Turnover

Other business income is money you have earned (or been paid if you use the cash basis) that is not part of your true business turnover.

For example, if you choose to sub-let part of your office, this would not be how you actually make money in your business but it is additional income you need to declare. Be careful not to include any income that needs to be shown in another part of your tax return such as bank interest you received which may need to be entered elsewhere in your tax return because that may get taxed differently.

Trading Income Allowance

If you wish to claim the trading income allowance then claim it in this section of your self-assessment tax return. You’ll need to enter your business turnover and if you have more than one self-employment business, you can split your allowance between them but you’ll still need to fill out a self-employment section for each.

You cannot use the trading income allowance to claim a business loss, unless you have claimed overlap relief.

Trading Income Allowance

Self-Employment Expenses

If you have claimed the trading income allowance, then you cannot claim any expenses so leave this box blank. But if you want to claim for expenses against your income then you have a choice to enter your expenses as a single total value or a detailed breakdown.

Single Total Value

If you choose to record your expenses as a single total value, you’ll need to enter it here. Your business profit or loss will be automatically calculated.

Detailed Breakdown

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If you choose to record your allowable expenses as a detailed breakdown, check the box. You’ll be able to claim for your expenses on the next page broken down. You’ll need to add up everything you paid for during your accounting period (or were billed for if you use traditional accounting).

How to Calculate Your Allowable Business Expenses

Capital Allowances

Capital allowances

Capital Allowances and the annual investment allowance are a type of tax relief you can claim on your self-assessment return for the cost of any equipment or cars you have purchased for your business. You cannot claim capital allowances if you use the cash basis, unless you have bought a car. You also cannot claim for capital allowances and the annual investment allowance if you claimed the trading allowance.

Capital Allowances for the Self-Employed
Annual Investment Allowance

Tax Adjustments

tax return self-employment section

Goods or services for your own use

If you took any goods out of your business or have included any costs in your expenses that were for personal reasons, then enter this figure now. However if you worked out your allowable business expenses and adjusted for any personal use of goods or services, then you can leave this box blank.

Loss brought forward from earlier years set-off against 2018-19 profits

If you have submitted a tax return before and showed a trading loss, then you can choose to set this off against any profits you have made in 2018/2019 here. It will go towards reducing your tax bill.

Using Tax Losses When You’re Self-Employed

Any other business income not already included

If you received income in your business, but it does not relate to what you actually sell, enter those amounts in this box, that includes the declaring the new enterprise allowance.

Tax Losses

tax return self-employment losses

If your business has made a loss, then there are four options on how you can use it:

  1. Carry Back Your Tax Loss
  2. If You Are Employed and Self-Employed and Want to Claim a Tax Refund
  3. Set Your Tax Loss Against Capital Gains
  4. Carry Forward Your Tax Loss

You cannot use options 1 and 2 if you use the cash basis for your short tax return.

Using Tax Losses When You’re Self-Employed

CIS Tax Deductions

tax-return-cis-deductions

This page is only for CIS registered subcontractors.

If you are a CIS subcontractor then add up all the deductions made from your payments by the contractors you worked for during the tax year. The deductions will be included on your deduction statements that you must legally be provided with. If you make an entry here, don’t forget to include in your ‘turnover’ your gross receipts from all contractors.

Gross means the full amount of the payments you received for the tax year, if more than £1,000, before taking off the CIS deductions.

Class 4 National Insurance Exemption

class 4 national insurance exemption
Adjustment to Profits Chargeable to Class 4 NICs

Some people are exempt from paying Class 4 national insurance if on 6 April 2018 they were:

  • at or over State Pension age at the beginning of the year of assessment, including if you reach State Pension age on 6 April 2018;
  • under 16;
  • during the tax year 6 April 2018 to 5 April 2019 you were not resident in the UK for tax purposes;
  • a qualifying trustee, a diver or diving instructor.

HMRC Annual Maximum for National Insurance Contributions.

Class 2 National Insurance Contributions

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For 2019/2020 you’ll need to pay Class 2 National Insurance if your business profits were more than £6,475 but you can choose to pay it voluntarily to protect your ability to claim:

Once you have completed your short tax return form you can finish filling in your tax return online and submit it to HMRC.

Disclaimer
While I have made every attempt to ensure the accuracy of the contents of this guide, I cannot accept responsibility for any losses or penalties you may incur while following the contents. I have prepared the contents for a wider audience so you may need to seek additional assistance relevant to your own personal situation.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.