Do you complete a tax return?
There are a number of reasons why HMRC will insist that you complete a tax return. Here is our guide to five reasons why you should be completing a return, if you are not already.
1. You are self employed
If you are self-employed, you always have to complete a tax return. This is also true if you are a member of a partnership.
2. You are a trustee
You will have to complete a tax return if you are:
- A trustee of certain types of pension scheme
- A trustee or personal representative
- Someone who manages the tax affairs of a deceased person
3. Your income from savings, investments or property is above a certain amount
If you do not already complete a tax return, you will have to do so if any of the following criteria is applicable:
- You have income from property (before deducting allowable expenses) of £10,000 or more
- You have income from investments and savings of £10,000 or more
- You have income from property (after deducting allowable expenses) of £2,500 or more
- You have income from untaxed investments and savings of £2,500 or more
- You receive income from the estate of a deceased person on which tax remains due
- You receive settlement or annual income on which tax remains due
4. You owe tax and HMRC cannot claim it through your tax code
Even if you pay tax through PAYE, you may still owe some tax at the end of the year. In this instance, you will still have to complete a tax return if:
- You wish to make a direct payment for the tax that you owe and you do not want to pay the tax owed through your tax code
- HMRC cannot collect the outstanding tax that you owe by changing your tax code. HMRC will inform you directly if this is the case.
5. You have Capital Gains Tax to pay
Capital Gains Tax is payable on the profits that you make when disposing of assets, such as shares or second homes. If you have Capital Gains Tax to pay, you will be required to complete a tax return.
For example, if you have sold, given away or otherwise disposed of an asset such as a holiday home or shares, you will need to complete a tax return including the Capital Gains Tax pages.