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Your tax return: the basics

INTRODUCTION TO SELF ASSESSMENT

Do you need to complete a tax return

Introduction

You will need to complete a Self Assessment tax return each year if you are self-employed or a partner in a business partnership.

Even if you aren’t in business, you may need to complete a tax return if your tax affairs aren’t straightforward, even if you already pay tax on your earnings through your PAYE (Pay As You Earn) tax code. This guide looks at some of the more common reasons for needing to complete a tax return.

Who needs to complete a tax return?

The most common reasons for needing to fill in a tax return are listed below.

If HM Revenue & Customs (HMRC) asks you to complete a tax return for any other reason (this will normally to be to make sure that you are paying the right tax and getting the right allowances) you must always do so.

You are self-employed

If you are self-employed (including being a member of a partnership) you always have to complete a tax return.

Company directors, ministers, Lloyd’s names or members

You must complete a return if you are any of the following:

  • a company director (unless you are a director of a non-profit organisation, for example a charity, and don’t receive any payments or benefits)
  • a minister of religion (any faith)
  • a name or member of Lloyd’s

Income above a certain level from savings, investment or property

If you don’t already complete a tax return, you’ll need to do so if you receive any of the following:

  • annual trust or settlement income on which tax is still due (even if you are only treated as receiving this income)
  • income from the estate of a deceased person on which tax is still due

Income from overseas

You must complete a tax return if you have any foreign income that’s liable to UK tax.

Your annual income is £100,000 or more

If you receive total income of £100,000 or more you’ll need to complete a tax return. You may have higher or additional rate tax to pay that hasn’t been collected through your tax code.

You need to claim certain expenses or reliefs

If you are employed and want to claim for expenses or professional subscriptions above HMRC threshold, you’ll need to complete a tax return. You can just write to HMRC with full details if you want to claim expenses below this amount.

Some less common reliefs, such as Enterprise Investment Scheme relief or relief on Venture Capital Trusts, can only be claimed by completing a tax return.

You owe tax and HMRC cannot collect it through your tax code, or you prefer to pay direct

If you pay tax through PAYE and owe tax at the end of the year, you’ll need a tax return if either of the following applies:

  • HMRC cannot collect the tax due by making a change to your tax code (they’ll tell you if this is the case)
  • you don’t want to pay the tax through your tax code – you prefer to make a direct payment instead

You have Capital Gains Tax to pay

If you have Capital Gains Tax to pay, for example you have sold, given away or otherwise disposed of an asset such as a holiday home or shares, you’ll need to complete a tax return and the Capital Gains Tax pages.

You have lived or worked abroad or aren’t domiciled in the UK

You may need to complete a tax return if you are:

  • not resident
  • not domiciled in the UK and claim the ‘remittance basis’
  • dual resident of the UK and another country

You are a trustee

You’ll need a tax return if you are a:

  • trustee or personal representative (including someone who manages the tax affairs of a deceased person)
  • trustee of certain pension schemes

Do you need to complete a tax return?

Things to check if you don’t need a tax return

If you don’t need a tax return, you still need to tell your Tax Office about new sources of income and any changes to your income if:

  • you pay tax through PAYE (Pay As You Earn) on income from a job or pension and your other taxable income changes or becomes liable to higher rate tax
  • you don’t pay tax through PAYE and your total taxable income is more than or increases to more than your Personal Allowance and any Blind Person’s Allowance you are entitled to

Your taxable income may increase if, for example you receive:

  • redundancy payments over £30,000 (payments below this amount aren’t taxable)
  • a gain on a life insurance policy, also called a ‘chargeable event’
  • income from new investments after you have come into some money

HM Revenue & Customs (HMRC) will decide if you need a tax return. If you pay tax through PAYE, HMRC may be able to collect the tax due through your tax code instead.

Types of tax return

There are different types of tax returns depending on the type of income you have.

How to get a tax return

You need to have your Unique Taxpayer Reference number to complete a tax return.

We can help you to get it and to prepare your tax return.

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