Most people have heard of a tax return, it’s a pretty common phrase, but beyond knowing it’s related to some kind of tax. How much do people really know about it? This Self Assessment covers the entire tax year and so it encompasses a wide range of information. If you’re not prepared for it, it can cause a headache come the deadline. Here is a run through to give you an understanding of what a tax return entails.
Who Needs to Complete a Tax Return?
If you’re self-employed, as you’re responsible for paying your own tax, you’ll have to complete one. This is even the case if you made a loss over the financial year. You’ll also have to complete one if you’re a company director or you earn over £100,000 a year. Belf self-employed or a company director are the most common reasons, but here’s a rundown of other circumstances where you’ll have to complete one:
You have income from savings, investment or property
You need to claim expenses or reliefs
You or your partner receive child benefit and your income is £50,000
You’re 65 and receive a reduced age-related allowance
You get income from overseas
You have income from trusts, settlements and estates
You have Capital Gains Tax to pay
You’ve lived or worked abroad or aren’t domiciled in the UK
You’re a Trustee
As a side note, if you have been told to complete a tax return, but you don’t think you fit the criteria, get in touch with HMRC’s Self Assessment helpline straight away on 0845 900 0444 so they can remove you from their list.
Registering for Self Assessment
You have to register for Self Assessment before the deadline, it isn’t just a matter of sending HMRC your information and that being that. They need to be aware so they can set up your records. Do this as soon as you know you’ll be doing a tax return. The latest you should do it is October 5 following the tax year you’ll be reporting on. Leaving it any later and you’ll risk not getting everything sorted with HMRC in time.
You’ll need a few bits of information when registering including your NI number and contact details. If you’ve completed a Self Assessment before, you’ll also need your Unique Taxpayer reference number. Once you’ve got all that, you’re ready to go.
If you’re newly self-employed with a new business, all you have to do is head here and HMRC will guide you through the process.
If you’re newly self-employed as a sole trader, then head here and HMRC will take you through it all.
If you need to complete a tax return for other reasons, such as having to pay Capital Gains Tax, then fill out this form and return it to HMRC at the following address:
Central Agent Authorisation Team
National Insurance Contributions Office
Benton Park View
Newcastle upon Tyne
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