Have you become chargeable to income tax or capital gains tax for the first time? Now is the time to notify HMRC.
The 5th October, the deadline for registering for Self Assessment, is fast approaching. If this deadline is missed HMRC have the right to charge a penalty. This penalty is based on the behaviour of the individual and the reasoning for not notifying HMRC, as well as a percentage of the ‘potential lost revenue’. ‘Potential lost revenue’ refers to the Income Tax, Class 4 NIC and Capital Gains Tax that becomes due. The penalty can be a maximum of 100% of this amount – the sooner you tell HMRC you are required to submit a tax return, the better.
Do I need to submit a tax return?
Generally, if any of these scenarios applied during the tax year ended 5 April 2021 a Self-Assessment tax return will be required:
- you are a self-employed sole trader whose annual turnover is more than £1,000;
- you are a partner in a partnership;
- you earned more than £2,500 renting out property;
- you, or your partner, received child benefit and either of you had an annual income of more than £50,000;
- you received more than £2,500 in other untaxed income, for example from tips or commission, or are an employee claiming expenses totalling more than £2,500;
- you receive more than £10,000 income from savings, dividends and investments.
- you earn more than £100,000 a year
- you are non-UK resident and you have taxable income in the UK;
- you earned income from abroad that you need to pay tax on;
- you received income from a trust; or
- you receive a payment or charge on a private pension;
How do I submit a return?
We are in an age where most things can be completed electronically, including the majority of tax return submissions. However, there are some instances in which HMRC cannot accept electronic submissions and a paper tax return must be filed instead - or it may be that it is your preference to submit a paper return to HMRC. If either of these are the case, then the deadline for filing a paper return for the 2020/21 tax year is 31 October 2021.
If you require assistance to file your 2021 Tax Return or require further information in connection with discussing a payment plan with HMRC, please contact Lisa Tait or your usual AAB contact.