Everything You Need To Know About Submitting A Tax Return | sheerluxe.com
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The deadline for submitting online tax returns is fast approaching – and while not everyone needs to complete one, it’s not just self-employed people who do. If you’re unsure whether you need to file forms or not, here’s what you need to know about self-assessment tax returns…

What are tax returns?

Tax is usually deducted automatically from your wages, pension and savings, however if you’re self-employed or receive income from other sources, you’ll need to report this to HM Revenue and Customs (HMRC) in a tax return. Each tax year runs from 6th April to 5th April the following year – so this is the period you’ll be assessed on.
 
Many people find the process of filing their tax returns daunting, but in most cases you actually only need to complete a small number of sections on the forms.

When’s the deadline?

The deadline for submitting paper tax returns for the 2016-17 year was 31st October 2017, but you can still complete an online tax return for this tax year up until 31st January.

It’s worth bearing in mind that if you submitted a tax return online the previous year, HMRC won’t send you a paper tax return this time round – instead, they’ll have sent you an email notification to submit your self-assessment online.

Who needs to send a tax return?

There are several reasons why you might need to submit a tax return, common ones include:

  • You’ve received an email or letter from HMRC telling you to send a return
  • You’ve been self-employed in the last year (if this is the case you can deduct allowable expenses too)
  • Your taxable income was over £100,000
  • You had income from abroad that you needed to pay tax on, or lived abroad and had a UK income
  • You received £2,500 or more in untaxed income – for example from tips or renting out a property
  • Your income from savings, investments or dividends from shares was £10,000 or more before tax
  • You were a trustee of a trust or registered pension scheme
  • You had a P800 from HMRC saying you didn’t pay enough tax last year - and you didn’t pay what you owe through your tax code or with a voluntary payment

If you’re still unsure whether you need to send a tax return, visit this page of the Gov.UK website on ‘who must send a tax return’.

Are there different forms for different situations?

When you file online, you’ll be asked to choose which sections you need to complete. The appropriate pages will then be created for your return. For example, if you’re self-employed, there should be an extra page for information about your business income and expenses. If you have income from abroad, there are ‘foreign’ pages to complete.

To find out which forms you need to complete, visit this page of self-assessment forms and help sheets.

How do you calculate how much tax to pay?

When you submit your tax return online, your income tax will be calculated automatically before you submit the return to HMRC. Make sure you check the calculation is reasonable though before you submit the return. If the result of the calculation –  a bill or a refund – is unexpected, then there could be a mistake on your return and you’ll need to go back over each section of the forms in detail.

How long should you keep financial records for?

You need to keep your records for at least 12 months after the date you file your tax return – and longer if you filed late or are subject to a tax enquiry. As a general rule, it’s a good idea to keep records for longer than a year, in case HMRC ask for information from earlier years, and if you’re self-employed, you need to keep your records for at least five years.
 
 

 

Inspiration Credit: TaxBack.com
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