If you receive income from sources other than primary employment, such as renting out a property, or self-employment, it won’t automatically be taxed through a system such as PAYE. Therefore, you will be required to fill out a tax return form. This process is known as self assessment.
HMRC must be informed of any additional income you receive on top of the income you pay tax on using the PAYE system. Anyone who believes tax has been underpaid, or overpaid, should contact HMRC.
Who is likely to have to fill out a self assessment tax return
- Company directors, self-employed sole traders, and people who are partners in a business partnership are just some of the people who will need to complete a self assessment tax return.
- If you or your partner receive Child Benefit payments, and your income is more than £50,000, you must file a tax return.
- If you have investments or savings which have not been taxed, and their value is at least £2,500, then you must file a tax return.
- If you have investments or savings, and the income value from them is at least £10,000, then you must file a tax return.
Capital Gains Tax can also affect how you fill out the self assessment tax return, so make sure you have taken this into account.
A self assessment tax return form is filled in after the tax year has ended, and it needs to be filed before the deadline. Generally, this deadline is the end of the next January, and if you miss this deadline, it will usually result in a penalty.
Penalties for missing deadlines
Returning your tax form late will incur a penalty. This is usually up to £100, within 3 months over the deadline, but it can be higher, especially if you also make the payments late.
Ways to fill out a self assessment tax return
Filling out a self assessment tax return online
It is possible to fill out a self assessment tax return form online, and submit it online. If you choose to do it this way, then the deadline is usually later, and you will have more time to get round to submitting it.
However, if you are a trustee of a registered pension scheme, or of a non-resident company, you can’t send the self assessment tax return form online, you must send a paper copy by the paper deadline.
Downloading a paper form
You can download a paper form to print and fill out for the self assessment tax return on the Gov.uk website.