Tax can be confusing and stressful for a lot of people. A common source of confusion that we’re asked about is whether someone needs to submit a personal tax return or not.
The answer depends on various factors, like income levels, sources of income and personal circumstances. In this blog post, we’ll check out who needs to submit a personal tax return and who doesn’t before going into some practical advice.
Let’s get started.
Who needs to submit a personal tax return?
Firstly, a personal tax return, also known as a self-assessment tax return, needs to be submitted by some people and businesses, the most obvious ones being:
- Those in self-employment: If you are self-employed or have income from freelance work, you are generally required to submit a tax return. This includes sole traders and partners in partnerships.
- High-income earners: Those lucky folk who earn an income above a certain amount also need to submit a tax return. As things stand this tax year, this threshold is £100,000 or more before tax. This income includes money from employment, savings, investments, and rental properties.
- Additional income sources: If you make money from sources other than employment, like rental income, dividends, or capital gains, you may need to submit a tax return.
- Living or working abroad: UK residents who have lived or worked abroad may still need to submit a tax return, depending on their income and residency status.
- Receiving other income or benefits: If you get an income or benefits that are not taxed at source, like income from a trust or foreign income, you may need to report this on a tax return.
What do you have to do if you need to file a personal tax return?
Submitting a personal tax return may seem daunting, but with proper preparation and understanding of the process, you’ll be able to handle it. Here are some practical steps to help you through the process:
- Register for self-assessment: If you realise that you need to submit a tax return, you have to register for self-assessment with HMRC, which you can do online.
- Gather what you need: Before you start filling out your tax return, gather all the documents you’ll need, including P60s, P45s, bank statements, and, if you’re self-employed, records of income and expenses.
- Fill out the form: HMRC provides online forms for submitting tax returns, making it easier to complete the process. Make sure that you provide accurate information and report all your sources of income.
- Don’t forget the deadlines: The deadline for filing online is 31 January following the end of the tax year. So, if you’re filing for the 2023/24 tax year, you would submit by the end of January 2025. You may have to pay a fine if you file late.
- Claim money back: If you’re self-employed, you can deduct allowable expenses from your income, reducing your tax liability. Make sure to claim all relevant expenses but ensure they really were for business and that you can prove you made the purchase.
- Call on the pros: If you’re unsure about any part of your tax return or have complicated tax affairs, don’t be afraid to ask a tax professional for help. They can help make sure that you comply with all tax regulations and minimise your tax liability.
Need help with your taxes?
Your tax return needs to be on time and accurate to allow you to fulfil your legal obligations. But we understand that you’re a busy person who might struggle to get your tax return done.
If you ever need any help, we’re here for you. We’ll complete your return and send it off so you can focus on your job, business and life with some extra peace of mind.
Tax return freaking you out? Contact us today.