Everyone’s circumstances change from time to time. We move house, change job, get married and have children. So, in order that you are always paying the right amount of tax, it is vital that Revenue and Customs (HMRC) always have up to date information about your circumstances.
So, here are ten changes you should tell HMRC about straight away.
1. You get married or enter into a civil partnership
If you get married or form a civil partnership, and one of you was born before 6 April 1935, you should get in touch with your Tax Office straight away. This is because you may be eligible for the Married Couple’s Allowance (MCA).
Similarly, if your civil partnership is dissolved or you get divorced (and you were receiving the MCA) you should let HMRC know.
2. You start/stop receiving rental income
If you rent a property, you should always let HMRC know if the amount of rental income rises or falls. For example, if you sell a property or you increase the rent, you may be paying the incorrect amount of tax.
3. Your spouse or civil partner dies
If your husband, wife or civil partner dies you need to contact your Tax Office if either of the following applies:
- Either of you claims Blind Person’s Allowance and some/all of this was transferred to the other spouse or civil partner
- You are claiming Married Couple’s Allowance
4. You start to receive the State Pension
When you reach State Pension age you don’t automatically stop paying Income Tax. However, your tax bill may go down, which is why it is vital that you should tell your Tax Office when you retire.
HMRC will send you a form ‘P161 Pension Coding’ to complete and you will also have to tell them:
- How much your State Pension is and the date it begins
- Your date of birth so they can give you your correct tax allowances
- Your total anticipated income for the tax year in which you will first draw your pension
5. You start or stop self-employment
You must tell HMRC that you have become self-employed as soon as possible – even if you already fill in a tax return each year. If you stop being self-employed, let your Tax Office know straight away.
6. You start or stop receiving company benefits
If you start receiving taxable company benefits you should tell your Tax Office immediately. This is to avoid facing a large tax bill at the year end. Employers don’t have to tell HMRC about any company benefits you get until the end of the tax year, unless it’s a company car.
If you stop receiving company benefits, also tell your Tax Office immediately. If you don’t, you may pay too much tax.
7. You start or stop receiving state benefits
If you start or stop getting state benefits it may affect your tax bill. The sooner you get in touch with your Tax Office, the sooner your tax code will be changed to collect the right amount of tax.
8. You start/stop receiving investment or savings income
If your savings and/or investment income changes, let your Tax Office know straight away.
9. Your income changes
You should contact your tax office if your income changes. What income changes you need to report and how you report them depends on your circumstances.
10. Your address changes
If you change address it’s important to let your Tax Office know. Even if you pay some or all of your tax through PAYE, under the Data Protection Act your employer or pension provider can’t pass on your new address to HMRC.