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Do you need to complete a tax return?

Do you need to complete a tax return?

When do you have to submit a tax return to HMRC?

Wednesday 11 November, 2015

With more than twenty years of experience in tax, I am always amazed to hear people say 'I never knew I had to complete a tax return'. Why am I surprised to hear this as hardly a week goes by without either tax or HMRC being in the news!

In all honesty I believe I should not be as surprised as I was recently reviewing the list of reasons to prepare a self-assessment tax return and as a result I have just come to appreciate that there is no possible way as to why anyone not involved with tax would even ever consider many of the situations identified, other than the most obvious.

Although I would hope that anyone who is self-employed or rents out a second home (buy-to-let) or holiday home is already aware they need to submit a tax return, how about some of the following.

  • You receive income in excess of £100,000
  • You receive income from abroad and live in the UK
  • You have lived abroad and were in receipt of a UK income
  • Either you or your partner earns over £50,000 and is in receipt of child benefit
  • You are a company director - this is often overlooked by taxpayers who form their own limited companies for their business.
  • You receive in excess of £10,000 in savings and/or investment income before tax
  • You have received income from profits due to the disposal of shares or a second property.
  • You are a higher rate or additional rate taxpayer and you receive savings interest or dividends from shares.
  • You are a trustee.

The list in itself is not exhaustive, however it certainly demonstrates that the requirement to submit a tax return may not be as obvious as one may have first thought.

Incidentally, you may wish to complete a tax return so that you can claim tax relief on donations made to charity or personal pension contributions. If you have work expenses in excess of £2,500 such as clothing and tools, mileage and working home costs from being an employee then you will need to make a claim by way of completing a tax return.

I would recommend that you advise HMRC if your circumstances change throughout the year as the need to submit a tax return may be deemed unnecessary and as a result could either save you time or an additional cost. It is worth noting that if HMRC identify that there is a need for you to submit a tax return then there could be penalties for non-notification and interest on outstanding tax.

If you are still unsure if you should be submitting a tax return or you think you should but need assistance in notifying HMRC then you can always contact myself or the Tax Matters team at info@taxmatters.tax or call on 01442 828006.