Every year we get asked whether or not someone needs a tax return and the reasons can be quite varied. so we decided to compile a guide on the various nuances of personal taxation.
However, this guide to self assessment tells you everything you need to know about whether or not you need to complete one.
Who has to file a return?
Investors, landlords, business partners and the self-employed are the main categories of people who are likely to need to complete a self assessment tax return
- Sole traders, that is those providing goods or services who are not incorporated into a company, should complete a tax return if they hadmore than £1,000 of income in the previous tax year before any allowances.
- Landlords who got more than £2,500 a year from their property.
- People receiving more than £2,500 a year from assets.
- Partners in a partnership business are also likely to need to do one.
- Income deriving from a capital gain, that is selling something for more than it cost, can be declared as part of the self assessment or via gov.uk’s Capital Gains Tax service.
- Those who received £10,000 or more in interest on investmentsor income from investments should do a return.
- Ministers of religion of any faith.
- Cryptocurrency traders whose profits are above the £2,500 income threshold.
- If you or your partner receives child benefit and has anadjusted net income of more than £50,000. (Adjusted net income is income net of any applicable tax reliefs.) This is because of the high income child benefit charge levied on high earners in receipt of child benefit.
- Non-resident UK landlords and other non-residents who have income deriving from the UK.
- Those whose expenses claims are more than £2,500 a year.
Less common categories of people who need to do a tax return are:
- People who want to claim tax relief on pension or gift aid contributions.
- Trustees, including of a pension scheme or of someone who has died, and executors of an estate.
- People who have received a P800 form from HMRC, claiming that they did not pay enough tax in the previous tax year.
- Income from foreign assets is taxable but income that is solely made up of dividends is covered by the dividend allowance.
- Income from a foreign pension should be declared to HMRC, which may result in it requesting a self assessment.
- People whose untaxed annual income is less than £2,500 a year should report the income to HMRC but may not have to complete a return. It maybe possible to pay tax on the income via their PAYE coding notice.
Gov.uk has a useful tool that should answer most people’s questions about their eligibility:
