Do I need to complete a tax return?

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Some people in the UK need to fill out a self-assessment tax return and submit it to HM Revenue and Customs (HMRC) before the January deadline. As well as helping you determine whether you need to complete a tax return, we explain how to submit one and what happens if you file your tax return after the deadline 

Key takeaways
  • Definition: A self-assessment tax return is designed to help HMRC work out how much tax you owe

  • Application: You may need to complete a tax return if you’re self-employed, earn money from renting out property or receive any other untaxed income

  • Submission: The most common way to submit a tax return is online via your Government Gateway account, although you can complete a paper tax return if you prefer

What is a self-assessment tax return?

A self-assessment tax return is used by HMRC to calculate the tax you’ll need to pay based on your income. If you’re employed, your employer takes care of this and tax is automatically deducted from your wage, pensions or savings, and this is known as PAYE (pay as you earn). 

If you’re self-employed or receive any other means of income, such as interest you earn from savings or income from a rental property you own, you’ll probably need to complete a self-assessment tax return.

Who needs to complete a tax return?

There are three reasons people might need to complete a tax return. There are:

  1. You have received untaxed income. See below for examples of this (‘How do I know if I need to complete a tax return?’)
  2. You want to claim a tax refund. In some circumstances, you may have to submit a tax return to claim a refund if you’ve paid too much income tax, for example if you’ve made charitable contributions or private pension contributions as a higher-rate tax payer.
  3. HMRC tells you to submit a tax return. HMRC may decide you need to file a tax return for a few different reasons. They’ll usually let you know by sending you a P800 form or sending you a notice to file a tax return.

How do I know if I need to complete a tax return?

Now you know what a self-assessment tax return is, you may be wondering whether you need to complete one. The answer depends on your employment status and personal circumstances. 

In the UK, most employed people are taxed at source (PAYE) and therefore won’t need to complete a tax return. However, you may need to complete a self-assessment tax return if you’re self-employed as a sole trader and have earned more than £1,000 in the previous tax year (usually 6th April to 5th April), or if you’re a business partner or director of a limited company

Completing a tax return means you’ll know how much income tax and national insurance you’ll have to pay on the profits generated by your business. 

You also may need to complete a tax return if any of the following applies to you:

  • You receive rental income of more than £1,000 from property that you personally own 
  • You made over £6,000 in profit from investments – usually property or stocks; shares in an ISA don’t count.
  • You received more than £10,000 from dividends – also not from a stocks & shares ISA
  • You received more than £10,000 in savings interest – not from a savings ISA
  • You want to claim tax relief from pension contributions if you’re a higher rate or additional rate taxpayer
  • You owe capital gains tax from selling a property or asset and have earned a profit
  • You want to claim child benefit, and you or your partner’s income exceeds £50,000
  • You receive taxable income from abroad, or you live abroad but receive an income in the UK
  • You’re a trustee of a registered pension scheme or any other trust
  • You’re a trustee or representative of someone who has died
  • You have received a P800 form from HMRC that says you didn’t pay enough tax during the previous year, and you need to pay an outstanding sum

What happens if I receive a notice to file a tax return?

Anyone who receives a tax return from HMRC, or a notice to file one, is legally obliged to complete and submit it. 

You can either submit your form by post or complete a tax return online (more on that below). The deadline for submitting a paper tax return is the 31st October following the end of the tax year to which it relates. You have until the 31st January if you want to file your tax return online.

When do I need to do a tax return?

We’ve already established who needs to complete a tax return, but what about when? Generally speaking, you’ll need to submit your tax return by 31st October after the tax year (if filing on paper) or by 31st January if you complete a tax return online. Some exceptions apply, for example, you’ll need to submit your online return by the 30th December if you want HMRC to automatically collect tax you owe using your tax code and you owe less than £3,000.

These are the latest dates you can submit your tax return but, of course, you don’t have to wait until then. You might want to complete your tax return as soon as possible after the end of the tax year, which finishes on 5th April. 

For some people, filing their tax return early provides peace of mind and gives them plenty of time to organise their finances for the year ahead. Plus, if you’re due a refund from HMRC you’ll receive it that much sooner.

Learn more about the UK tax return deadline.

How to complete a tax return

You can submit your self-assessment tax return online or via post. HMRC will then calculate how much tax you owe based on what you’ve reported. How much tax you pay will depend on the income tax band you fall in, and may differ if you need to pay any capital gains tax.

Can I complete a tax return form online?

Yes, you can use HMRC’s online service by first registering on the GOV.UK website. After registering, you may need to wait up to seven days for your Personal Identification Number (PIN). That means it’s important to register early, so you avoid a late tax return. 

After receiving your PIN and using it to log in, you’ll be able to complete your tax return form. Once you’ve submitted your information, the online system will perform the tax calculations for you, and you’ll receive an acknowledgement that your tax return has been safely received.

What happens if my tax return is late?

If you miss your tax return deadline, you’ll have to pay a penalty, which depends on how late your tax return is. You’ll be charged a £100 penalty if your return is up to three months late, and potentially more if it’s later than that. You can estimate your penalty payment online at the GOV.UK website.

How do I pay my tax return?

You can pay your tax return via bank transfer, debit card or cheque. You can also pay at your bank or another financial institution if you’ve received a paying-in slip from HMRC.

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