UK Tax Returns

Who needs to submit a UK tax return?

Most people in the UK pay all their tax "at source", for example , through Pay As You Earn (PAYE) if they are employed, and are not required to file a tax return.

In the UK the following people need to submit a UK tax return:

1. The self-employed (unless your trading income is exempt under the trading allowance £1,000). The profit or loss is irrelevant.
2. A partner in a partnership business.
3. A minister of religion.
4. A trustee or the executor of an estate.
5. A company director (this one is a bit contentious and requires a bit more explaining as it is not clear cut)
6. A recipient of untaxed income. For example: Interest that is not taxed "at source", or rental income. If the income is less than £2,500 and the person also has PAYE income, they may be exempt from a tax return, but they must contact HMRC each year to inform them of the amount so it can be deducted via a change in their tax code.
7. Individuals with untaxed income of £2,500 or more.
8. A recipient of annual income from a trust or settlement, or income from the estate of a deceased person (they should get a form called an R185 showing the income details)
9. Recipients of annual income from savings and investment of £10,000 or more, before tax.
10. Individuals with annual income of £100,000 or more before tax.
11. Individuals subject to the High Income Child Benefit Charge.
12. Individuals with tax due at the end of the year that cannot be collected via their PAYE coding notice in a later year.
13. Individuals claiming more than £2,500 of expenses. This is usually against employment income (items like professional subscriptions, the Charted Institute of Taxation for example!)
14. Foreign income or gains arising outside of the UK. There is usually an exception when the income is less than £300 as it may be treated as UK income. It would still be prudent to advise HMRC of the situation annually.
15. Individuals who made Capital gains or losses in the year. There are de minimus rules for exemptions and also specific rules for residential property from 6 April 2020
16. HMRC could also request that you submit a tax return for other reasons. As a condition of a penalty suspension claim for example.

If you are not sure if you fall in to any of these categories, please get in touch now for a quick chat about your own circumstances. You do not want to be hit with penalties if you are late to file.