Do I Need to Complete a Tax Return? Complete Guide
If you are in self-assessment, you must complete a yearly tax return and pay for any tax due. This process must show your income and capital gains and will also allow you to claim reliefs and allowances.
In this article, we will go through everything you need to know to complete a tax return in the United Kingdom, including a step-by-step guide with all the required information you must provide.
What is a Tax Return?
A tax return is a form in which you declare how much income you have received or capital gains you have made in a given year. You can also use your tax return to claim reliefs and tax allowances.
In other words, a self-assessment tax return is a 'return' of all your taxable income.
Once you've completed the form, you must send it to HM Revenue & Customs (HMRC). You can do this on paper or online through their Self Assessment Tax Returns page.
Who Needs to File a Tax Return in the UK?
In the United Kingdom, most people pay their taxes 'at source'. If you are employed, you usually do so through Pay As You Earn (PAYE), and you are not required to file a tax return. However, if you are working for yourself, you are a trustee or the executor of an estate, a partner in a partnership business, or a minister of religion, you will need to complete a tax return.
You must do so if, in the last tax year (you can refer to the section below to read more about important dates), any of the following apply:
- You were self-employed (and a 'sole trader'), and you earned more than £1,000 (before you took off any claims)
- You earned £100,000 or more.
- You were a partner in a business partnership.
In some cases, you will also need to file a tax return if you have untaxed income, such as:
- Money from renting out a property
- Commissions and tips
- Foreign income
- Income from investments, dividends, and savings
- Support payments or COVID-19 grant
There are other cases in which you must file a tax return. For example, if you are a non-resident and have taxable income in the UK if you or your partner receive child benefit and your adjusted net income is more than £50,000, or if you incorrectly claimed COVID-19 payments.
If you need clarification on whether you are required to file the return, you can use HMRC's tool to help you determine eligibility.
What is Self Assessment (SA)?
Self-assessment means you are responsible for filing your own tax returns and paying tax for that year. It's important to mention that it is also your responsibility to tell HM Revenue & Customs if you need to complete a tax return. You must also calculate and include all your taxable income and capital gains.
The 'Tax Year' and Deadline Dates
You must complete your tax return for the tax year, which runs from 6 April to 5 April in the United Kingdom. For example, if you need to pay tax for 2022-2023, you would do so between 6 April 2022 and 5 April 2023.
If you need to pay income tax, capital gains tax, claim tax relief, etc., you must do so before 31 January during the tax year. For example, for the 2022-2023 tax year, you must complete your payment by 31 January 2024. If you have a second payment, the second payment will be due on 31 July.
If you still need to file a tax return for the previous tax year, you must notify HMRC by 5 October. If you submit the form after 31 October, you will need to pay a penalty - even if there's no actual tax.
Everyone who is required to file a tax return will receive a notice shortly after the end of the tax year on April 5. Note that, if the conditions stated above apply, you will need to complete and file your tax return even if you have not received such a notice.
Do You Need to Keep Records?
Yes, there is a legal requirement that states that everyone's self-assessment must keep records. HMRC can ask to check these. If they are not complete or accurate, you can be charged a penalty.
The tax return records you must keep can be digital or on paper.
If you are in self-assessment but not self-employed, holding records for at least 22 months is recommended. For example, if you submitted your tax return for the 2021-2022 year, you should keep records until at least 31 January 2024. If you are self-employed, you should keep records from the submission deadline for at least five years.
How to Fill In a Self-Assessment Tax Return Online
We've covered the eligibility for tax returns and what you must submit. Now, let's go through all the steps necessary to file the form.
Filing a Tax Return If You've Never Done It Before
If this is your first time completing a tax return, the first thing you will need to do is register for Self Assessment.
There are a few different ways to do this, depending if you are in a partnership, you are self-employed, or you are not employed but need to declare income. You can find out more and register for self assessment at GOV.UK.
Once registered, you will be sent a UTR, or Unique Taxpayer Reference (a ten-digit number). You should receive this code by post in about ten working days or sooner if you use the HMRC app.
To submit your self-assessment form online, you must also set up a Government Gateway account. The instructions to do this will be included in your UTR letter.
Once you've set up your Government Gateway account, you will get an activation code on the post. Make sure you can access this account before you try to begin your tax return.
Filing a Tax Return If You Have Done It Before
Filing a tax return can seem daunting, even for those who have done it before. However, as long as you have all the information, it doesn't need to be.
Before you start filing taxes for the year, make sure you have access to:
- Your UTR of ten-digit Unique Taxpayer Reference
- Your National Insurance number
- The details of your income from self-employment, interest on shares, and/or dividends
- Records of all your self-employment expenses
- Any contributions to pensions, charity, or other payments eligible for tax relief
- Any records of income on which you have already paid tax.
How to Complete a Tax Return - Step-by-Step Guide
A self-assessment tax return has two sections: The SA100 section (which is the main one) and a supplementary page.
The SA100 section includes the following:
- Taxed and untaxed income (interests and dividends)
- Pension contributions
- Charity Donations
- Benefits such as Child Benefits, State Pension, and Blind Person's Allowance
The supplementary pages include the following:
- Income as a company director
- Income as a foreign national or dual resident
- Income from self-employment
- Income from property
- Income from capital gains
- Income from abroad
Now, let's go through each of these in some more detail.
This section deals with tax and untaxed income from dividends from shares and interest earned from bank accounts and building society accounts.
SA100 Pensions, Annuities, and Benefits
This section includes considerations for people who are retired or claiming benefits. If you are retired, you will need to fill in the following:
- The total amount of money received from State Pension
- The gross amount of the State Pension lump sum
- The gross amount of other pension lump sums (excluding State Pension) and annuities
If you are claiming benefits, you will need to fill in the following:
- The amount of money received from Jobseeker's Allowance of Incapacity benefit
- The grand total of taxable benefits from Bereavement Allowance, Carer’s Allowance, and/or Industrial Death Benefit.
Some benefits are not taxable and don't need to be added to this section. These include Attendance Allowance, Pension Credit, Working Tax Credit, lump sum Bereavement Support Payment, Child Tax Credit, Personal Independence Payment (PIP), War Widow’s Pension, income-related Employment Support Allowance, or Maternity Allowance.
SA100 Other UK Income
In this section, you will need to include other taxable income that is not related to interest or dividends. For example, you can use it to add allowable expenses and any income tax you might have already paid on them.
SA100 Pension Contributions
This section deals with any payments you have made into registered pension schemes, employer's scheme, or annuity contracts.
SA100 Charitable Donations
This section allows you to add the grand total if you donated to charities during the tax year. You may also include amounts for land or buildings gifted to charities and any shares and securities.
SA100 Blind Person's Allowance
This section allows you to specify whether you are claiming Blind Person's Allowance.
SA100 Student Loan Repayments
If you are currently repaying your Student Loan, you can add them in this section and any deductions made by your employer.
SA100 High Income Child Benefit Charge
This section should be filled only if you are receiving Child Benefits and your income for the tax year was over £50,000.
SA100 Marriage Allowance
If your income for the tax year was less than your Personal Allowance, you can transfer some of your Personal Allowance to your spouse in this section.
Self-Employed SA103 Income
If you have earned money through self-employment for the tax year, you will need to use this section to enter the turnover amount. In other words, the grand total of all sums coming in before you deduct any expenses.
You can enter different amounts if you have more than one source of income - but make sure you clearly state which job has earned you the most money.
If you received a self-employed income support grant, or SEISS, you could fill this information in under the optional question in the ‘Other tax adjustments for your business trading name’ section.
Self-Employed SA103 Expenses
When you are self-employed, there are two ways to declare your expenses:
- If your turnover is below £85,000, you can enter the expenses without itemising them.
- If your turnover is over £85,000, you must explain individual amounts for each expense type and add a total at the end.
These are some of the expenses you can include:
- Cost of equipment used at work
- Wages, staff costs, and salaries
- Subcontractor payments
- Cost of resale stock
- Travel and vehicle expenses
- Interest on loans
UK Property Income SA105 Income
If you are a landlord, you can use this section to enter the income from your rented properties. There are two sections. The first deals with income from all furnished holiday lettings. The second from rent and income from other properties.
UK Property Income SA105 Expenses
If you rent out a property, you can claim expenses for repairs and maintenance, insurance, rates, ground rent, loan interests, and legal and professional fees.
Capital Gains SA108 Income
If you need to declare Capital Gains Tax, you can use this section to include the total disposal proceeds for shares and securities, residential and non-residential properties.
Capital Gains SA108 Expenses
Lastly, you can also claim some allowable costs, such as the price paid to buy the asset, improvement costs, and other costs involved in selling or buying it (for example, Stamp Duty).
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