Although many people in the UK have their income taxed at source through PAYE, the majority of self-employed and company directors will need to fill in a self-assessment tax return. You’ll also be required to complete a self-assessment tax return if you have other sources of untaxed income or meet specific criteria.
You always file your return for the previous tax year, the most recent running from 6th April 2022 to 5th April 2023. Provided you’re liable to file for self-assessment, it’s crucial to meet deadlines set by HMRC to avoid being penalised. There’s a penalty and interest charged for late payment, although you have a window for appealing the late penalty if you provide a reasonable excuse.
To avoid missing out on your self-assessment tax obligations and answer the question; “do I need to do a tax return”, this article highlights what a self-assessment return is, who must file, as well as the important tax deadlines.
What is a self assessment tax return?
A self-assessment tax return is used to calculate the tax against all your income and capital gains. It also allows you to claim any back allowances and tax relief – where applicable. Overall, self-assessment is a process through which HMRC collects income tax from self-employed people. The exception is those taxed at the source.
You have the option to file online or submit a paper tax return. Your tax return doesn’t have to be complicated, as long as you take the necessary steps to prepare and file your return.
Who needs to complete a tax return?
HMRC require taxpayers to file tax returns if they meet any of the criteria listed below:
- A director of a limited company or business partner
- A trustee or representative of a deceased person
- A person earning from a trust or pension scheme that is registered
- A minister of religion
- Is a ‘Name’ at the Lloyd’s of London insurance market
- An employee or pensioner who earned £100,000 or more in the tax year
- Anyone who earned £1,000 or more of self-employed income in the year
- Anyone who earned £2,500 or more in untaxed income from tips or commission
- Anyone who earned £10,000 or more from savings, investments, and dividends
- Anyone with a state pension that was more than your personal allowance and is your sole income
- Anyone who earns taxable income from abroad or lives abroad while earning an income in the UK
- Anyone who needs to pay capital gains tax on profits from selling assets
- Anyone entitled to claim extra tax relief on pension contributions if you’re a higher or additional rate taxpayer
- Anyone claiming child benefit or you or your partner’s income is over £50,000
- Anyone who earned rental income from land and property in the year
- Anyone who received a P800 from HMRC indicating your failure to pay enough tax in the previous year and still not paid the amount owed
If you’re still wondering if you need to file a tax return in the UK for the previous tax year (6th April 2022 – 5th April 2023), here’s a tool to help you be certain.
You can also read our article on UK Tax Rates, Tax Allowances and Tax Bands for the current and previous tax years.
Will HMRC tell me if I need to file a tax return?
HMRC sends you a return or a filing notice online in April or May every year if you’re registered for self-assessment. You may also receive an email instead of a paper notice if you’re subscribed to HMRC’s email service.
Generally, you will receive a filing notice from HMRC for the following reasons:
- You earned untaxed foreign investment, land, or property income
- You had to complete a tax return in the previous year
- You earn capital gains that exceed the yearly exempt limit which is up to £6,000 (or £3,000 for trusts) compared to 2022/23 where the thresholds were set at £12,300 (or £6,150 for trusts)
- You receive a reduced age-related allowance as a pensioner
However we have a self-assessment system in the UK so, even if HMRC does not send you a request to file a tax return for a tax year, if you meet any of the criteria listed above, you need to get in touch with them and inform them that you need to file.
You then need to complete the return and submit it to HMRC by the expected date. Not only that, but you have to comply, whether you owe tax or not. This includes even if you’re an employee and all your income is taxed under PAYE. In this case, the employer will issue you a form P60 to submit your self-assessment. If you operate as a limited company, you will need to file a company tax return and tax return on personal income from that company. However, you may ask HMRC to withdraw the return if you have reasonable grounds that you should not be under self-assessment.
If you’re under self-assessment, it’s your initiative to submit your return to the HMRC instead of awaiting their notice. Overall, it’s important to declare all your taxable income and pay any tax due on it on time every year.
When is the tax return deadline for self assessment?
Fortunately, the deadlines for registering, filing, and paying your self assessment are straightforward.
For the previous tax year that started 6th April 2022 and finished 5th April 2023; the following deadlines apply:
- 5th October 2023: Self-assessment registration deadline
- 31st October 2023: Deadline for paper tax returns
- 31st January 2024: Deadline for submitting all online tax returns plus any tax due for the 2022/23 tax year as well as the first payment on account for the 2023/24 for those eligible
- 31st July 2024: This is the date for the second payment on account for 2023/2024 for those eligible
To get a better understanding of how payment on account works, we’ve put together an article to explain what it is and how it is calculated.
Missing the tax deadline even a day late will attract costly penalties applied by the HMRC starting from £100. Always submit the return, even if you don’t owe any tax.
Are you ready for your self assessment?
Whether you’re a sole trader or company director, the key is to start now, even if you’ve missed the registration deadline. If you find it overwhelming to do your own tax return, you can seek the help of our expert team to help remove the headache.
Please don’t hesitate to get in touch for more information on self-assessment tax returns, including how we can help you take full advantage of your tax opportunities. With specialist accountants in Wimbledon and Surbiton we can help with all areas of personal taxation and handle the stress of dealing with HMRC.