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Who Needs to File a Self-Assessment Tax Return?

Updated: Dec 8, 2023

Several categories of individuals are typically required to file a self-assessment tax return. If you are represented by any of these groups, it is crucial for you to file your self-assessment tax return promptly.

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Self-Employment: If you earn income through self-employment, whether as a sole trader or in a partnership, and how to file a self-assessment tax return is a must.

Property Income: If you receive income from rental properties, it is essential to report it on your self-assessment tax return. This includes income from residential or commercial properties.

Dividends or Interest Income: If you have earned dividends from shares or received interest on savings or investments, these sources of income should be declared in your tax return.

Capital Gains or Losses: If you have made capital gains or incurred capital losses from selling assets, such as stocks, property, or valuable possessions, you need to include these details in your self-assessment tax return.

Company Director: Directors of limited companies, regardless of whether the company is active or dormant, are required to file a self-assessment tax return.

High-Earning Individuals: If your employment income exceeds £100,000, you are obligated to file a self-assessment tax return. This includes income from salaries, bonuses, and other employment-related earnings.

HMRC Request: If HM Revenue and Customs (HMRC) has sent you a letter specifically instructing you to file a self-assessment tax return, it is crucial to comply with their request promptly.

Tax Relief or Refund Claims: If you are eligible to claim tax relief or are seeking a refund for any reason, you will need to file a self-assessment tax return to ensure you receive the benefits you are entitled to.

When Are Self-Assessment Tax Returns Due

The deadline for filing self-assessment tax returns in the UK is generally 31st January following the end of the tax year. For example, the tax return for the tax year running from 6th April 2022 to 5th April 2023 would be due on 31st January 2024. It is important to note that the tax liability for the year is also due on the same date.

Consequences of Not Filing

Failing to file a self-assessment tax return or missing the deadline can have serious consequences. Here are a few key points to consider:

1. Late Filing Penalties: If you fail to submit your tax return by the deadline, you will be subject to penalties. The initial penalty is £100, which increases over time. Additionally, interest is charged on any unpaid tax from the due date.

2. Additional Penalties: If your tax return remains outstanding for more than three months, further penalties will be imposed. These can reach up to £900 or 100%

3. Loss of Tax Benefits: Not filing a self-assessment tax return can result in the loss of certain tax benefits and allowances. For instance, if you fail to report your income accurately, you may miss out on tax relief or deductions that you are entitled to, resulting in a higher tax liability.

4. Investigation and Legal Consequences: HM Revenue and Customs (HMRC) has the authority to launch investigations into taxpayers who fail to file their returns or provide inaccurate information. This can lead to additional penalties, fines, and potential legal action.

5. Negative Impact on Credit Rating: Non-compliance with tax obligations can also impact your credit rating. HMRC has the authority to share information with credit reference agencies, which can result in difficulties obtaining credit or loans in the future.

6. Loss of Time and Resources: Dealing with the consequences of not filing a self-assessment tax return can be time-consuming and stressful. It may involve engaging with HMRC, providing explanations, and potentially facing further audits or investigations.

This guide is for illustrative purposes only Accountax can only advise on Taxation matters, through the appropriate protocols. Full Terms and Conditions available on request.

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