Do You Need To File A Self-Assessment? – TaxBack

from the blog.

Do You Need To File A Self-Assessment?

Are You Unnecessarily Filing Self-Assessment Forms?

Failure to file income tax on time usually results in fines and
penalties that would have been avoided when diligence is
practiced. But a new problem arose due to a mad dash to beat
tax deadline – unnecessary filing of self-assessment.

Self Assessment

Depending on your circumstances, however, this may be completely
unnecessary. You could be one of the 400,000 people who HM Revenue
& Customs tells every year not to file a self-assessment form.
Didn’t get the memo? It’s time that you determine whether or not
you need to file one.

Are you self-employed or doing freelance work?

Under the circumstances, you are expected to fill out a
self-assessment form. But due to the fluidity of Britain’s
workforce, it is common for your circumstances to change in one tax
year. It is possible for people to move in and out of having to
make a self-assessment return. This is why HMRC highly recommends
that you inform the office of whatever changes in your
situation.

According to HMRC spokesman, “We automatically review the
self-assessment system to ensure only those who genuinely need to
complete a tax return have to do so”.

“Anyone thinks the circumstances have changed so that they don’t
need to complete a return should let us know.”

Doing so is the easiest way to determine if you need to submit
online self-assessment. Your life would also be easier, especially
because you don’t need to beat the tax deadline.

Do you owe less than £3000 in tax?

According to HMRC, “people who owed small amount of tax from
savings income or occasional extra work” do not need to bother with
filling out self-assessment forms. It may seem unfortunate that you
were not informed before, but now you know. This means you do not
need to waste time compiling statements, invoices and completing
forms. Whatever money you owe will be deducted automatically from
your pay packet in April.

In fact, higher-rate taxpayer could feasibly earn up to £7500
from other work without the need to complete self-assessment
forms.

But there are circumstances where you really need to complete a
self-assessment tax return. These include:

  • You are a business partner or director of a limited
    company
  • You earn an annual income of £100,000 or receive an annual
    pension with the same amount
  • Your pre-tax investment income is worth £10,000 or more
  • You incurred capital gains tax after selling a property or
    shares
  • You are a trustee or representative of someone who died
  • You sold a property portfolio

But take the guesswork of the process, by calling HMRC. You
should also make a habit of checking your mailbox, since letters
are usually sent to advise people against filing self-assessment
tax returns.

It is understandable that people would want to beat the deadline
to avoid the fine of £100, plus interest of any tax that has not
been paid by the due date.

In the event that you really need to fill out a self-assessment
form, remember to do the following:

  • Prepare all the necessary paperwork, including income from
    self-employment, employment, property and other income gains –
    savings, investment returns, etc.
  • Familiarise the tax return forms and what should be avoided to
    minimise errors. You can always refer to tax experts for
    advice.
  • Remember any mistakes you made from previous tax filing and
    learn from them.

To discuss your position in regards to your self-assessment, tax
returns or anything else you may have questions on contact our
helpful team here.



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