Do I Need to File a Tax Return?

Filling in a self-assessment tax return is daunting to many people. The tax system is very complicated, and it is your responsibility to make sure that your tax return is correct. Kench & Co Ltd is here to help and would be delighted to speak to you about your individual circumstances. More people are being drawn into self-assessment currently, so do check whether you may need to file a return, even if you were not required to file previously.

The financial tax year runs from April 6 to the subsequent April 5. This is the timeframe you must consider when completing your tax return. If you need to complete a tax return and have not done so previously, you must inform HMRC by October 5.

You are likely to be required to complete a self-assessment tax return when:

• You are self-employed and generate an income exceeding £1,000 per annum before accounting for expenses.
• You participate as a partner in a business partnership.
• You serve as an owner or director in a limited company and receive income not subject to PAYE (such as dividends).
• You hold the role of a religious minister within any faith or denomination.
• You receive income from a trust or settlement.
• Your income from savings or investments amounts to £10,000 or more before taxation.
• You earn rental income.
• You or your partner receive child benefits and your income is over £50,000, and you are the higher earner.
• You have a capital gains tax (CGT) liability due to the sales or gifting of an asset.

Completing Self-Assessment

1. Gather Documents: The first step in completing your self-assessment tax return is gathering all the necessary documents. If you have an accountant, you can pass the documents to them to prepare your return. Otherwise, continue to the following steps below.
2. Register for Online Services: To file your self-assessment tax return online, you’ll need to register for an online account with HMRC. This account will allow you to access and submit your tax return digitally.
3. Choose the Right Tax Year: Ensure you complete the tax return for the correct year. For the 2023 tax return, you’ll be reporting income and expenses from the tax year ended on April 5, 2023.
4. Begin the Tax Return: Log in to your HMRC account and select “Self-Assessment.” You’ll start by entering your details and Unique Taxpayer Reference, which is essential for identifying you in the tax system.
5. Income and Expenses: Carefully enter all your sources of income, including earnings from employment, self-employment, dividends, rental income, interest arising from banks and building societies, pensions, annuities, and other state benefits received, and any other taxable income.
6. Deductions and Reliefs: You can claim allowable deductions and reliefs to reduce your taxable income. These can include business expenses, certain donations, and tax reliefs for specific activities.
7. Tax Calculation: HMRC’s online system will calculate your tax liability based on the information you provided. Review this calculation to make sure it’s accurate. If you’re unsure, consider seeking advice from an accountant.
8. Submit Tax Return: Once you’ve reviewed and confirmed your tax return, you can submit it electronically through the HMRC website. You’ll receive a confirmation receipt upon successful submission.
9. Deadline: The deadline for filing and paying your tax return is January 31^, 2024, for the 2022/23 tax year. If you owe taxes, make sure to pay the amount due. Late payments may incur penalties and interest charges.
10. Keep Records: Maintain copies of your completed tax return, supporting documents, and payment receipts. This will help in case of an enquiry by HMRC.

We understand that dealing with taxes might be stressful, which is why we’re here to offer our support to guide you through the tax landscape. Whether you’re a busy individual or a small business owner, we can assist you by preparing your tax return on your behalf and advising on the appropriate tax payments to make.