If you have any income that you don’t pay tax on already, then you might need to complete a tax return.
Here are some examples of circumstances that mean you need to complete a tax return.
You’re Self Employed
If you’re self-employed then you have to complete a tax return. You still have to complete a tax return if you make a loss or are only self-employed for part of the year. Remember that you also need to inform HMRC that you’re self employed.
You Earn £100,000+
If you earn more than £100,000 per year, even if you pay income tax on your salary through PAYE, then you’ll still need to complete a tax return. This is because your earnings take you into a higher income tax band, and this rate may not be picked up through your regular tax code.
The following must always complete a tax return:
- Company directors, unless they work on a voluntary basis, like for a charity.
- Religious ministers.
- Names or members of Lloyd’s of London.
Savings, Property, and Investments
If you have additional income from any of the above areas, you might be able to arrange your tax affairs with HMRC so that you pay tax on these earnings through your regular tax code. If you don’t do this, then you will need to complete a tax return, and remember to save some of your additional income for paying your tax bill.
You need to complete a tax return if you’re claiming business expenses. Remember this is only for expenses that aren’t already returned to you by your company, a notice of which you should receive from your employer in the form of a P11D.
Child Benefit Recipients
A new tax charge was introduced in January 2013, which means thousands of people found themselves completing a tax return for the first time. You need to complete a tax return if:
- You earn over £50,000 per year.
- You live with your partner and you earn more money.
- You or your partner are entitled to child benefit.
- You decide to keep receiving child benefit and pay the tax charge.
Check the laws surrounding your tax liabilities for money earned abroad, as you’ll probably need to complete a tax return. This includes any savings and overseas investments you have.
Remember to check your residency status, too. If you’re a UK national but don’t reside in the UK, you still need to complete a tax return to ensure HMRC are aware of your affairs.
Capital Gains Tax
If you’ve sold a property or another high value asset then you could be liable for capital gains tax, and will need to complete a tax return and capital gains tax pages.
Trustees also have to complete a tax return.