At its simplest there are two sets of people who have to submit a Self Assessment tax return to HMRC:
- Those who have been told to submit one, and
- Those who haven’t been told to, but need to submit one anyway.
It’s quite easy to know you are in the first category. Normally in April HMRC will have sent you a paper tax return. If last year you filed an electronic return then they don’t waste paper sending out a paper form. Instead then send you a single A4 letter saying at the top right ‘Self Assessment: notice to complete a tax return.’
The people in the second category are in more of a predicament. Their circumstances mean they need to file a tax return, however for one reason or another HMRC has not told them this. This may because HMRC is not aware of the current types of income the person gets, or it might be that HMRC has been told, but has failed to issue a return or notice. Hard to imagine, but they do make mistakes!
How then do you know if you need to file a tax return each year? The easiest way to find out is to consult HMRC’s website at www.hmrc.gov.uk/sa/need-tax-return.htm
I can summarise some of the main sorts of people who need to file returns for 2010/11 are as follows:
- All self-employed people (full-time or part-time)
- Landlords whose gross rents exceed £10,000 per year
- Landlords whose rents after allowable expenses
- Most company directors (unless unpaid director of a charity or similar)
- Pensioners whose income in 2010/11 was over £22,900 (and whose tax allowances may be affected by their exact income.)
- Anyone with income over £100,000.
- Anyone who made capital gains over £10,100 (e.g. by selling or transferring shares or property)
- Those who sold shares, land, property etc (apart from their main home) for more than £40,400.
If you believe you need to submit a tax return, then the way to tell HMRC is to call them on 0845 900 0444 or send them form SA1 – available at www.hmrc.gov.uk/sa/forms/sa1.pdf
There are penalties if you are supposed to send in a return but don’t tell HMRC. Better to err on the safe side and tell HMRC about your circumstances, and let them decide if a form is required.
Always keep a copy of anything you send to the tax office, and always get the name of anyone you speak to if you brave the telephone approach.
If you do need to send in a Tax Return and have to register, then while awaiting the form start pulling together the information you will need to declare all your income, including ‘already taxed’ income – as everything needs to go on the form.
Adrian Huston, a former tax inspector, is a director of Belfast tax and accountancy firm Huston & Co – www.huston.co.uk or 028 9080 6080.