Everything you need to know about tax returns
Tax returns must be filed with HMRC (HM Revenue & Customs) in order to declare taxation liability if you have any form of income over £1000 per year - other than employment where your tax is automatically taken from your wages. Tax returns can be a confusing topic for anyone that needs to fill them out, and if you don’t send them off or if you file them incorrectly, you could be faced with large penalties. Here’s everything you need to know about tax returns:
Who needs to file tax returns?
You’ll need to file tax returns if you’re self-employed and earnt over £1000 in the last financial year (April to April), if you’re the director of a company, have property income such as rentals, or have other income that isn’t taxed before you receive it (e.g. through PAYE).
How to work out if you need to file a tax return
If you’re still not sure if you need to file a tax return, feel free to get in touch for our advice or check out this useful tool.
Tax returns for self-employment
If you’re self-employed, you should ensure you budget for your self-assessment tax bill to make sure you don’t spend all your profits throughout the year and find yourself unable to pay your bill. To do this, you’ll need to go to the HMRC website in order to calculate an estimate of how much you’ll need to pay. You just need to enter an estimate of your monthly or weekly profit, and this will give you an idea of the Income Tax and National Insurance you’re required to pay. You should also keep records of the business income as well as any of your expenses for the tax return, whether you’re a sole trader or a partner in a business.
What happens if a payment is late?
You’ll be faced with a fine of £100 if you miss the deadline to pay or file your tax return. If you’re over three months late with your payment, you’ll be fined £10 per day, up to £900.
What happens if you lose your Unique Taxpayer Reference (UTR) number
Whenever you set up a limited company or register for self-assessment, you’ll automatically be sent a UTR number. If you lose this number, you can call the self-assessment helpline in order to make a request. However, if you’ve got a limited company, you can go online to request for your Corporation Tax UTR.
Do you need an accountant?
Taxes and finances can be difficult to wrap your head around if you’re not used to dealing with them and aren’t familiar with all the terminology. If that’s the case, you may prefer to seek professional help and expert advice to help you deal with your tax returns. Our team of expert accountants can help with all your tax return questions, and can even organise and file your tax returns so you don’t have to. This will not only save you the time and hassle of sorting everything out yourself but will also give you peace-of-mind that everything has been done correctly, so you won’t be hit with a surprise penalty or bill.