Self Assessment Tax Return
Historically the number of people required to complete a self-assessment or personal tax return was limited. But the growth in start-ups, entrepreneurs, the self-employed and a general trend towards having more than one source of income means that more than 11 million people were liable for self-assessment in 2020. There are even instances whereby miscellaneous income from eBay sales and AirBnB rentals have pushed individuals over certain thresholds or had a significant impact on their income across the course of a year.
Do I need to complete a Self-Assessment tax return?
When an individual is self-employed, earns a signficant income or is a company Director, they are required by law to carry out a self assessment of their personal tax liability. This process considers income from jobs, dividends, shares and savings – those items which pay you a regular/frequent amount of money.
In most cases, a tax return needs to be submitted if your circumstances match one or more of the following:
- You are self-employed and earnings exceed £1,000
- You are a company director
- Your annual income is £100,000 or more
- You have income from savings, investments and/or property
- You need to claim expenses or tax reliefs
- You or your partner receive Child Benefit and your income is over £50,000
- You get income from overseas and/or from trusts, settlements and estates
- You have disposed of assets either by sale or gift
- You’ve lived or worked abroad and/or aren’t domiciled in the UK
- You’re a trustee
Making Tax Digital
With the Government’s ‘Making Tax Digital’ long term plans introducing greater electronic management of taxes, getting your tax return right is becoming increasingly important. In the long term, HMRC expects all tax calculations to be managed in real time, ultimately putting pay to the need for annual returns. Whilst this remains some way off, each year we see steps taken to bring it closer to reality.
In the meantime, engaging with HMRC through the use of a tax return will ensure everything is declared and the correct amount of tax has been paid on your earnings and investments.
Completing a self assessment form may be second nature to some where others find it daunting, time-consuming and labourious. So, why not let our team of accountants take care of the process? If you need someone to handle the completion of your tax return, contact us today for a personalised fee estimate.