What is an SA302? How to use the form

Life as a self-employed person brings various challenges. One of these is securing loans and credit from banks. Also known as a tax calculation, an SA302 provides an official way to prove how much you earn.

Read on to find out how to get an SA302 from HMRC, plus what this form includes and an example scenario.

What is an SA302 form?

Self-employed people use an SA302 form to summarise their income over a tax year. It includes their total income, tax allowances, and any tax they have paid or owe.

After completing their Self Assessment Tax Return, they will be issued this form by HMRC.

They can then show it to any banks and lenders who ask to see an SA302, meaning they can demonstrate their income and creditworthiness.

Who needs an SA302 form?

Anyone who has registered with HMRC and completed at least one Self Assessment Tax Return can get an SA302.

Unlike PAYE employees, those who are self-employed will likely need an SA302 at some point in their careers.

Say you’d like to increase your mortgage or apply for a business loan. The bank or lender will want enough of a guarantee you’ll be able to make the repayments. That’s where an SA302 comes in – confirming your previous year’s earnings to show what you’re likely to earn in the future.

How to get my SA302 from HMRC

You’ll need to visit HMRC’s website to get your SA302 tax calculation. Here’s how:

1. Log into your HMRC online account – you’ll need your UTR (Unique Tax Reference) number
2. Navigate to ‘Self Assessment’ and select ‘More Self Assessment Details’
3. Click on ‘Get Your SA302 Tax Calculation’ to download and print the form

It’s worth noting: you can get up to four years’ worth of information. Also – for anyone in a hurry – you’ll need to wait 72 hours after submitting your tax return to print this form.

What does an SA302 look like?

Your SA302 tax calculation includes:

1. Declared earnings: All the money you earned in a tax year, including profit from self-employment, rental income, dividends from UK companies, interest from banks, and UK pensions and state benefits
2. Taxable income: The amount above the Personal Allowance threshold – generally £12,570 – that is not exempt from tax (exemptions include ISA savings and some welfare benefits)
3. Calculated Income Tax owed: The amount of tax to be paid to HMRC, based on its band of rates

An SA302 example

Meet Sunita who runs her own hairdressing business and also owns a flat that she rents out. She’d like to double the size of her hair salon and needs a loan from a bank.

After completing her Self Assessment Tax Return for the year, she can access an SA302 form which includes the following information:

• Her declared earnings total £28,000 (£21,000 from her salon and £7,000 from her flat)
• She gets £12,570 Personal Allowance which leaves a taxable income of £15,430 (£28,000 - £12,570 = £15,430)
• This Income Tax is charged at the Basic Rate of 20% = £3,086
• Her calculated Income Tax owed is £3,086

Once she has downloaded or printed her SA302 form, she can show it to the bank who’ll use it to help decide whether or not to give her the loan.

Is an SA302 the same as a tax overview?

In short, no. The two documents work in partnership but perform slightly different functions. A tax overview merely summarises the total income you reported to HMRC and any outstanding amounts.

Because a tax overview is less comprehensive, banks and lenders tend to prefer seeing your SA302 form.

Lighten your business admin with Xero

At Xero, we know too much financial admin can weigh down a business owner. That’s why our accounting software is designed to automate and streamline tasks wherever possible.

When it comes to paying your Income Tax, for example, this is simplified by our cloud-based software which ensures compliance with HMRC. You can also benefit from up-to-date reporting, income tracking, and many other features that ease the daily grind of running a business.

For more info, check out our essential guide to accounting software for the self-employed and a wide range of other business guides.