Tax returns are not just for the self-employed - there are many different reasons why you may need to complete a self-assessment tax return. We’ll explain here some of the reasons why you may need to file, and what to do if you are unsure.
You will need to file a tax return if you are:
- working for yourself and your income from self-employment was more than £1,000 - anything under this amount falls within the new ‘trading allowance’.
- renting out a property and your rental income is more than £2,500 - you will need to phone HMRC to give them the figures if you receive between £1,000 and £2,500.
- a company director (except for directors of a not-for-profit organisation and you did not receive any pay or benefits, like a company car or medical insurance).
- a trustee of a trust or registered pension scheme or the executor of an estate.
- living abroad and have a UK income - this includes non-UK resident landlords.
or if you receive:
- income from savings and investments of more than £10,000.
- dividend income of more than £10,000.
- other ‘untaxed income’ of more than £2,500. This could be tips or commission. If the income is less than £2,500 a year you might not have to complete a tax return but it is still your responsibility to report such income by contacting HMRC.
- taxable foreign income, even if tax was paid in the country of origin, whether or not you are resident in the UK.
- a taxable annual income of more than £100,000.
- A P800 form from HMRC showing tax due at the end of the year that cannot be collected via your PAYE income and you did not make a voluntary payment.
- regular annual income from a trust or settlement, or income from the estate of a deceased person and further tax is due.
- state pension which is more than your personal allowance and is your only source of income, except in cases where your pension commenced on or after 6th April 2016.
- income over £50,000 (or your partner’s income was over this amount) and one of you claimed child benefit.
- capital gains where:
- You have given away or sold assets worth £46,800 or more for 2018/19; or
- You have a capital loss but your gains net of any losses are more than the annual exemption for 2018/19 of £11,700; or
- You have no losses to claim but your gains are more than the annual exemption for 2018/19 of £11,700; or
- You need to make any other capital gains tax claim or election for the year.
You may also need to file a tax return if you:
- need to claim for work expenses which total £2,500 or more.
- want to claim tax relief for donations made to charity or private pension contributions.
- need to prove you are self-employed, for example to claim tax free childcare.
- want to make voluntary class 2 national insurance payments to qualify for benefits.
This list is not exhaustive and HMRC may want you to complete a return for other reasons. If you are still not sure if you need to file a tax return please take a look at the www.gov.uk website or you can phone HMRC on 0300 200 3310.
If HMRC have sent you a tax return or a notice to complete one, then you must fill it in and return it by the due date, which for the 2017-18 tax year is 31st October 2018 for paper returns and 31st January 2019 for online submissions. If you do not believe that you meet any of the self-assessment criteria, you can phone HMRC and ask for the tax return to be cancelled. If HMRC agrees, this will mean that you no longer have to file a return.
Posted in: Tax Tips