Industry News - 6th July 2016
Do you need to complete a self assessment tax return ?
If you’re confused about whether or not you need to do a tax return, then our quick guide will give you all the information you need to decide.
Increase in taxpayers filing a tax return
With over 11 million tax returns due to be completed in the UK in 2016, the number of UK taxpayers filing returns with HMRC has risen over the years. This increase is partly due to the surge in self-employment, but also follows changes made in 2013 to child benefit.
Many taxpayers in the UK don’t need to fill in a tax return as they pay tax automatically through their salaries,
pensions or savings. However if you receive income from other sources on which tax is payable, then you’ll need to
complete a return.
When you need to complete a tax return
You will need to fill in a tax return, either by post or online and submit it to HMRC, if you:
– Are self-employed – this applies to the self-employed and those in a partnership. Whether you make a profit or loss, you still must submit a tax return.
– Are a director of a limited company – if you receive remuneration from your limited company, you must complete a return.
– Have savings or investment income over £10,000 before tax.
– Have an income over £100,000 (from all sources).
– Have rental income from a property – a common misconception is that if you are making a loss on a rental property or if you are renting it out to a friend or family member, then you don’t need to complete a tax return. This is not the case, all income and expenses, whether you’re making a profit or a loss, must be declared.
– Claim for child benefit and you or your partner’s income is over £50,000.
– Receive dividends from investments or shares (in a family company, for example) and you are a higher rate
taxpayer or additional rate taxpayer.
– Sold an asset liable to capital gains tax – examples of this could be a second property or shares. The annual
exemption is currently £11,100, so any gain above this, needs to be declared.
– Live abroad but have a UK income – UK individuals who work or retire abroad and have UK pension or UK property income or investments.
– Are a UK resident but have foreign income – such income could include overseas property income, overseas
pension, salary or investments.
Getting in touch with HMRC
If any of the above conditions apply to you and you haven’t received a request from HMRC to do a return, it’s your
responsibility to get in touch with them and let them know you need to submit a return.
If HMRC has sent you a letter or email telling you to submit a tax return, you must submit it, even if you do not have any tax to pay. Late tax returns can incur interest and penalties.
More information on who should complete a tax return is available from HMRC.
We can help
Call us on 01299 488860 for help with tax returns. We’re experts in tax and we’re happy to help you through the process, however simple or complex.