Many people pay their tax through the payroll system, which means they receive a payslip which shows deductions made for Tax and National Insurance and their employers pay these deductions over to HMRC on their behalf.
However you may have received income in an alternative, or additional, way to the payroll system and are wondering whether you need to submit a tax return. Here are some of the scenarios which may mean you need to complete a self assessment tax return –
- You earn money working for yourself, whether as a part time job or you work from home where you are paid weekly/monthly but do not receive a payslip. Or you work full time for yourself and so are self employed.
- You own additional properties, not just the one you live in, and receive rental income from tenants renting from you.
- You are employed, receive a payslip, but earned a gross salary of more than £100,000
- You are or were the Director of a Limited Company during the tax year or a Partner in a business whether you own shares or not.
- You received interest that was untaxed or not taxed at source. Generally the interest you receive on savings in a bank or building society is given to you after tax but there are circumstances where you receive interest gross, like if you have a National Savings and Investment account. This doesn’t include savings in an ISA or if you were lucky enough to win on the Premium Bonds, these are tax free and don’t need to be shown on your tax return.
- You received dividends from shares you own, this can include a dividend on shares you bought in a listed company as an investment or dividends you paid yourself through your own Limited Company.
- You or your partner have gross income of over £50,000 and claim child benefit.
- Your savings or investment income was £10,000 or more before tax.
- You need to let HMRC know about a Capital Gain. For example you sold a second property and made a profit or a loss, which you need to report to HMRC.
- You completed one in the previous year. It may sound silly, but if you completed a return previously, HMRC will assume you need to complete another. If your circumstances have changed from the previous year and you feel you should not complete a tax return, contact HMRC on 0300 200 3310 for a chat and ask them to withdraw the return. As long as they agree, they should remove the requirement and cancel any penalties which may have been charged.