With the new tax year having just begun on the 6th April, now is the perfect time to consider the last 12 months and begin preparing for the year ahead.
The first question to be asking yourself is whether you will be required to register for the self-assessment tax return system, if you have not done so previously.
What is self-assessment?
Certain taxpayers must complete a tax return, detailing: income, capital gains, applicable allowances and reliefs.
Most employees in the UK will pay through the PAYE system, whereby a self-assessment tax return is not required. Your employer pays the tax you would owe to HMRC on your behalf, before paying you the remainder.
Do I need to complete a self-assessment tax return?
If the following applied to you between the period of 6th April 2018 – 5th April 2019, then you may need to register for self-assessment for the 18/19 tax-year.
- You are self-employed as a “sole trader” and earned more than £1,000.
- You are a partner in a business relationship.
- You are the director of a company.
- You received money from renting out a property.
- You earned untaxed tips or commission.
- You have income from savings, investments or dividends.
- You have foreign income.
- You made a capital gain but have not paid tax on this using the “real time” Capital Gains Tax service.
- You are a minister of religion.
- Your annual income is £100,000 or more.
- Your income (or your partners) was over £50,000 and one of you claimed child benefit.
What if I receive a tax return from HMRC but none of the above apply to me?
Anyone who receives a self-assessment tax return from HMRC is legally obliged to complete one, unless HMRC agree to cancel it.
It is important to note that the onus is on you to contact HMRC as soon as possible if you believe you have good cause to not complete a self-assessment tax return. The sooner you make contact, the better your chances of HMRC agreeing to withdraw the return.
What if I have not completed a tax return previously?
If this will be your first self-assessment tax return, you must notify HMRC by the 5th October following the end of the tax year in question. Failure to meet this deadline can result in penalties, though HMRC may be willing to reduce these penalties to zero on receipt of the finished tax return before the due date.
If you are at all in doubt, please contact Stack & Jones Accountants on 01869 277973 for a free 1-hour consultation.
Stay tuned for further articles assisting with the Self-Assessment process over the coming months.
Sources: which.co.uk, gov.uk
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