Self Assessment Tax Return
It is the way HMRC collect Income tax on personal income that is not taxed at source
This tax return is very important for the residents of UK. So, without any further delay let’s know the 7 essential things about Self Assessment Tax Return.
1. This tax return policy is basically mandatory for all individuals who meet the following criteria:
• You are a director of a limited company.
• You receive dividend from shares.
• If annual income for the last year was more than £100,000.
• If your investment or savings was £10,000 or more before deducting tax.
• You are self employed.
• You made capital gain tax on selling home or shares.
• If you or your partner income was over £50,000 and you claimed child benefit.
• If you receive untaxed at source personal income from rental property, investments etc….
• If you received income from foreign business, or lived abroad but earned UK income.
2. Individuals who have only pension or wages as finances are usually exempt from self-assessment. However, any individual who is self-employed or meets with the criteria mentioned above should file for return.
3. There are two modes of filing the return – through form or online. The self assessment tax return online is very simple. An individual needs to register online in order to file return.
4. Tax return is only possible after registering with HMRC. Afterwards, you can use either paper forms or software to file tax return. For non-resident company and guardians of pensioners, you must use only paper form. The paper forms can be submitted by 31 October, whereas, online self assessment can be submitted by 31 January.
5. The tax year in UK usually starts from April and ends on April of the next year. For self assessment tax return, an individual needs to register by October (the date is usually informed). The returns through paper should be done by 31 October, whereas all online tax returns should be made by 31 January.
6. While filing return, whether on paper or online, you must keep all your invoices and bank receipts handy. These will help you to fill correct information and your tax return would be filled accurately. Make sure that you have paid off your self assessment bill by 31 January. HMRC will approve your tax return and will see what and how much you own according to what you file.
7. You can get penalized if you fail to send your tax return or even your self assessment bill. For instance, if your return is delayed for up to 3 months, you could be fined £100. The fine can be even more if the return has been delayed for more than 3 months.
Self assessment tax return is an easy process to do. However, if you face any problem, you can even hire professional accountants to help you out with all the paper work.