Each year, there are millions of UK taxpayers who need to ask themselves if they are required to make a Self Assessment tax return. Even though PAYE is designed to have employees’ tax automatically deducted, others do have to report their income to HMRC in person.
Failure to file when it is due may incur penalties and interest, and thus it is necessary to know your filing requirement. This book aims to provide the clarity that one needs in understanding who is obligated to complete a Self Assessment tax return and how to get it done.
Who Is Required to File?
If you receive untaxed income, you may have to do a Self Assessment tax return. This includes such income as self-employment profits, rental, investment, or earnings abroad. Even company directors and individuals who earn a large volume of dividend income or have extensive savings income are sometimes requested to do so.
Even though your income is taxed at source, there are certain circumstances—like claiming particular tax reliefs, or receiving child benefit if your income is above £50,000—through which a filing requirement arises.
Key Deadlines to Consider
The UK tax year is the 6 April to 5 April period. Paper returns must be filed by 31 October following the end of the tax year, but online returns are due by 31 January. Payments must also be made by 31 January, with the facility for an optional second payment on account being made by 31 July.
Late payments attract automatic penalties, increasing with the length of delay. Being aware of such deadlines keeps you in compliance and also saves you on unnecessary fines.
How to Prepare Your Personal Income Tax Return
You can send your Self Assessment tax return online through HMRC’s dedicated portal. Registering Self Assessment involves having a Unique Taxpayer Reference (UTR) and getting your online account set up.
Gather relevant information such as income statements, spending records, and relevant tax relief records. Filing online is easy and has built-in checks to avoid errors.
Common Errors to Avoid
One of the most common errors is omitting small sources of income, such as interest on deposit or irregular freelance work. These will affect your overall bill for taxes and must be declared.
Also, missing opportunities for tax relief, such as allowable expenses or pension contributions, can cause overpayment of tax. It’s worth going through all possibilities of claims prior to submitting your return.
Conclusion
Knowing who is required to file Self Assessment tax return is important for being compliant with UK tax rules. If you have income that has not been taxed or belong to one of the special groups, completing on time and accurately is important.
For peace of mind and professional advice, having professionals like UK Property Accountants on board ensures your tax matters are taken care of smartly and with confidence.
