Self Assessment is a system HMRC uses to collect Income Tax but It’s not just self-employed people and partnerships who must submit a tax return.
For those that are employed, tax (and National Insurance) is usually deducted automatically from wages through pay as you earn (PAYE). And by financial institutions when it comes to pensions and savings.
But, people and businesses with other income (including COVID-19 grants and support payments) must report it in a tax return.
Who must submit a tax return
You must complete and submit a Personal Tax Return if you fall into any of the categories below:
- You are self-employed as a Sole Trader and earned more than £1,000
- You are a partner in a business partnership
- You are the Director of a limited company and receive dividends from your company
- You receive rent or income from property in the UK.
- You receive foreign income
- You receive any form of untaxed income, capital gains or losses.
- You have your own pension fund or certain savings/investments.
- You receive other untaxed income specified by HMRC.
- You had income from savings, investments or dividends of £1,000 or more before tax.
- Either your income or your partner’s annual income was more than £50,000 and you claimed child benefit.
Other reasons for sending a return
You don’t have to, but you can choose to fill in a tax return if you want to:
- claim some Income Tax reliefs
- prove you’re self-employed, for example to claim Tax-Free Childcare or Maternity Allowance
Get support from a Licensed Accountant
If you are not confident about preparing and submitting your self assessment tax return or don’t have the time, getting a licensed accountant to do it for you can actually save you money. It can free up your valuable time which you can use to concentrate on your business. You can also benefit by knowing it has been done correctly and on time. Mistakes can be costly. As can missing the deadline.