What is a TAX Return?

What is a TAX Return?

Nick Robinson

Nick Robinson

Mar 21, 2013 | Accounting

 

A tax return is a very common form that reports the details of your taxable income, capital gains and tax allowances and relief from the past calendar year. HM Revenue and Customs (HMRC) may issue a tax return to you for every tax year, which runs from April 6 of one to April 5 the next year. By law, people who receive a tax return must complete the form. HMRC, in turn, uses the information you provide on that tax return to determine your tax payment, or if you are eligible for a tax refund.

 

Who Completes Tax Returns?

 

Most taxpayers do not fill in tax returns. If HMRC believes you are paying the proper taxes through the Pay As You Earn program relative to your salary and benefits, or you are on occupational pensions, HMRC will not mail you any sort of tax return. However, there are certain groups of people who generally receive tax returns from HMRC, including those who are self-employed, those who direct private companies and corporations, those who earn rental income from properties, pensioners, and other miscellaneous people who have income that cannot be collected through the Pay As You Earn program.

 

Whilst most pensioners will not fill out tax returns, there are certain tax-free allowances for senior citizens that may require a tax return at some point. While it is a complicated decision on whether or not you qualify, most pensioners who receive pension amounts that are higher than their tax-free personal allowance totals will pay tax returns, as the Department for Work and Pensions does not deduct taxes before the pension is paid to the citizen.

 

The Ball Is In Your Court

 

As a British citizen, it is your prerogative to notify the HMRC if you have received taxable income in the past year. You must do this by October 6 after the tax year in which that income was received. People who have not received a tax return and think they should have must contact the HMRC and request a return to be sent to you.

 

Do not wait for HMRC to catch their mistake and contact you. People who pay late on their tax returns may incur a penalty with interest added for failing to disclose income and adequately pay their taxes by the letter of the law.

Complicated? Start With Communication

 

Tax returns and the requirements of paying them can be complicated. Whether you believe you have paid too little or too much on your tax return, the HMRC will not necessarily catch the mistake without your help. Therefore, any questions or concerns would be well voiced at the HMRC helpline: 0845 9000 444. Doing so will clear up any misconceptions or concerns about tax returns, and ensure that you remain within legal bounds of your tax responsibilities.

 

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