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The “Tailor Your Return” Section

The “Tailor Your Return” Section. The “Tailor Your Return” Section is made up of three pages. It allows HMRC to get to know you and lets you remove sections of the tax return that are not relevant to you.

What Are the 3 Pages of the “Tailor Your Return” Section?

The three pages cover the following:

  1. Sources of income you have like self-employment, employment, rental income;
  2. Interest and dividends you may have received;
  3. Tax reliefs and allowances that you may be able to claim to reduce your tax bill like the marriage allowance.

“Tailor Your Tax Return” Page 1

The first box you will see is a declaration that you are providing honest and accurate information.

tailor your tax return

In other words, you are confirming that you are telling the truth about all the income you have received.  You may face fines if HMRC discovers you didn’t declare any income you should have at a later date.

You’ll need to tick this box to confirm your understanding to continue with completing your tax return.

If You Were An Employee

You’ll need to choose “yes” if you were employed, whether full time or part-time during the tax year. You’ll then be asked to enter the name(s) of your employer.

Unsure of the name of your Employer? Check your P45 or P60.

If you have a Limited Company and you are on the payroll, then you’ll need to enter the name of your own Company.

Remember even if you have paid all your tax through PAYE, you’ll still need to include details of all your employments during the tax year.  

Don’t worry, you’ll be credited for any tax you have paid so you won’t pay twice.

tailor your tax return

What You Need to Do:

– If you were employed during the tax year, enter how many employments you had and the name of your Employer(s);
– If you were not employed by anyone, choose “no”.

If You Were Self-Employed

If you were self-employed during the tax year you’ll need to let HMRC know about it, along with your business name.

If your business turnover (that’s everything you get paid you before deducting any expenses) is more than £1,000 you’ll need to choose “yes”.

Then you’ll be asked for the number of businesses you have as well as the name(s).

If your business turnover is less than £1,000 then here’s where you may need to make your first strategic tax decision:

£1,000 Trading Allowance

The HMRC £1,000 trading allowance is available for all businesses with a turnover of less than £1,000 you don’t need to tell HMRC about it or pay tax on it!

If you want to use this, then read this on HMRC Trading Allowance to help you work out whether it is right for you.

And don’t forget many self-employed people still choose to declare their business income, even if their turnover was less than £1,000 for various reasons including:

  • Creating an allowable tax loss that they can use against future profits;
  • Wanting to voluntarily pay Class 2 National Insurance contributions to protect their full entitlement to state benefits like Pensions;
  • Being subcontractors who need to claim back tax deducted under the Construction Industry Scheme (CIS);
  • They expect their turnover to exceed £1,000 in the next tax year;
  • They are self-employed and want to claim maternity allowance or tax-free childcare so need to document their earnings officially.
tailor your tax return

What You Need to Do:

– If your business turnover is more than £1,000 choose “yes”, enter the number of businesses your run and their names;
– If your business turnover is less than £1,000 and you want to use the trading allowance, choose “no”.

If You Were in a Partnership

If you are in a Partnership you’ll need to let HMRC know about it here, along with its name(s).

The trading allowance cannot be used for partnership arrangements, so you’ll need to include details in your tax return even if your partnership’s income was less than £1,000.

What You Need to Do:

– If you were in a partnership choose “yes” and enter the number of partnerships you are part of and their names;
– If you were not in a partnership, choose “no”.

If You Were a Landlord

If you receive rental income from letting out land or property, then you’ll need to choose “yes”.

But if the amount you received during the tax year was less than £1,000 then you have the option to not declare your rental income by using the £1,000 Property Allowance.

£1,000 Property Allowance

The £1,000 Property Allowance can be used by Landlords who received less than £1,000 in rent during the tax year you can choose to use the Property Allowance.

This means they don’t need to declare the income on a tax return and it is exempt from tax.

If you feel claiming this allowance may be right for you then read this about the Property Allowance to check you meet the criteria.

Keep in mind that some landlords still choose to declare their rental income because they want to claim for allowable expenses and create a tax loss they can use against future profits.

What You Need to Do:

– If your rental income is more than £1,000 choose “yes”;
– If your rental income is less than £1,000 and you want to use the trading allowance, choose “no”.

If You Received Foreign Income

If you received foreign income, then you may need to include it on your tax return in the foreign income section.

I don’t deal with foreign income in this guide so you should seek additional advice if you think you have received income relevant to this section.

tailor your tax return

What You Need to Do:

– If you have received foreign income, choose “yes”;
– If you have not received foreign income, choose “no”.

If You Made Capital Gains

If you made capital gains during the tax year, then you need to let HMRC know about it here.

I don’t deal with capital gains tax in this guide so you should seek additional advice if you think you have entered into a transaction that has capital gains tax implications.

tailor your tax return

What You Need to Do:

– If you have made capital gains, choose “yes”;
– If you have not made capital gains, choose “no”.

Once you have completed this page, press the green button to “Save and Continue” to page 2.

“Tailor Your Tax Return” Page 2

Page 2 contains a list of questions to tell HMRC about all the other types of income you received during the tax year. You’ll need to answer “yes” or “no” to each of them.

Let’s run through each of the questions:

Did you receive any interest etc, for example, from UK banks, UK building societies, UK unit trusts?

If you have a bank account or trust account on which you earn interest then tick “yes”, even if it is only a small amount

Did you receive any dividends, for example, UK companies, authorised unit trusts, open-ended investment companies, foreign companies (up to £300)?

You must select “yes” if you received dividends from any investments you own or from your own Limited Company.

Did you receive any UK pensions, annuities or state benefits, for example, state pension, occupational pension, retirement annuity, Incapacity Benefit?

If you received any UK pensions, annuities or state benefits, choose ‘Yes’, otherwise choose ‘No’.

Certain state benefits do not need to be declared on your tax return like the Maternity Allowance, housing benefit and universal credit. You can check if a state benefit you have received is taxable on the HMRC website here.

I don’t deal with pensions and annuities in this guide and it can be a complicated topic, so seek professional advice if you need help declaring these on your tax return.

Were you or your partner (if you have one) entitled to receive Child Benefit during the year 2018-19?

If you received child benefit during the tax year, you’ll need to tick “yes”, if not choose “no” and move on to the next questions.

You’ll need to let HMRC know if you received child benefit as well as whether you earned more than £50,000 because you may need to pay the high-income tax charge.

If you were employed, what counts as earnings is not just your base salary but also things that your employer pays you such as:

  • Bonus’
  • Commissions;
  • Company cars;
  • Private healthcare

Here’s how you can work out your earnings for Child Benefit purposes.

If you were self-employed, your earnings will be your business profits.

The person with the highest income will have to pay the tax charge, so you’ll need to tell HMRC whether this was you or your partner. That way they’ll know who to expect the payment from.

You’ll need to follow this guidance if you are paying the High Earnings Child Benefit Charge.

Did you receive any other UK income?

If you received any other income that hasn’t been captured anywhere else, then you need to tell HMRC about it here. That includes things like lump sums, share schemes and life insurance gains.

I don’t deal with UK income of these types in this guide, so get professional advice to help you declare this correctly.

Have you made any income tax losses in the tax year?

If you made income tax losses during a tax year you may be able to offset these against your other forms of income. For example, investors who make a loss on an EIS company may be able to offset it against their capital gains or income tax.

I don’t deal with income tax losses in this guide, so if they are not relevant to you select “no” otherwise choose “yes” and seek professional advice.

Have you received Pensions in the tax year?

If this applies to you choose “yes”, otherwise choose “no”.

I don’t deal with pensions in this guide, so get professional advice to help you declare this correctly.

Once you have completed this page, press the green button to “Save and Continue” to page 3.

Tailor Your Tax Return Page 3

Did you make contributions towards a personal pension or retirement annuity?

If you are self-employed and paying into a pension, you’ll be able to get tax relief on a certain amount of the contributions you make, currently up to £40,000. You’ll receive tax relief at the highest rate of tax you pay.

If you have contributed towards a pension scheme then you can claim relief on your payments if you:

  • contributed to a registered pension scheme;
  • have taxable UK earnings, such as employment income or profits from self-employment, or
  • are a resident in the UK for some time during the tax year or sometime in the 5 preceding years and when you joined the pension scheme.

Did you give to charity?

If you gave a Gift Aid donation to charity choose ‘Yes’. That way you will be able to claim back any tax you have paid.

If you, or your spouse or civil partner, were born before 6 April 1935 do you want to claim married couple’s allowance?

If this applies to you choose “yes”, if not choose “no”.

Do you want to transfer 10% of your personal allowance to your spouse/civil partner?

Depending on yours and your partner’s income, you may be able to transfer 10% of any unused personal allowance to/from your partner. This is known as the Marriage Allowance and the person claiming it must have income for tax year 2018/2019 of less than £11,850 (excluding up to £5,000 in tax-free savings interest).

You can read more about the marriage allowance here to check if you are eligible to claim it.

If you want to make the transfer then select “yes”, otherwise select “no”.

Was your total income £11,850 or less plus up to £5,000 tax-free savings interest and your spouse/civil partner’s total income below £46,350?

If you want to claim the marriage allowance, then select “yes” to confirm you meet the criteria. If not, choose “no”.

Do you want to claim other tax reliefs and deductions, for example, community investment tax relief, venture capital trust shares, maintenance/alimony payments?

If you want to claim any other tax reliefs, then let HMRC know about it here. This includes things like:

  • community investment tax relief;
  • venture capital trust shares;
  • maintenance/alimony payments relief.

Have you had any 2018-19 Income Tax refunded or off-set by us or JobCentre Plus?

If you have received an income tax refund choose “yes”, if not choose “no”.

Did you have a tax adviser?

If you have paid for professional tax advice, then you can select “yes”. Otherwise select “no”.

Even though I am an Accountant, I am not your accountant. The advice in this guide is prepared for a wider audience rather than personalised advice, so you may need to seek additional assistance relevant to your own personal situation.

Were you party to one or more tax avoidance schemes?

If this applies to you, then you can select “yes”. Otherwise select “no”.

Do you need to disclose any income from disguised remuneration avoidance schemes?

If this applies to you, then you can select “yes”. Otherwise select “no”.

Are you acting in capacity on behalf of someone else?

If this applies to you, then you can select “yes”. Otherwise select “no”.

Once you have completed this page, press the green button to “Save and Continue”.

Disclaimer
While I have made every attempt to ensure the accuracy of the contents of the “Straightforward Guide To Completing Your Self-Assessment Tax Return”, I cannot accept responsibility for any losses or penalties you may incur while following the contents. I have prepared the contents for a wider audience so you may need to seek additional assistance relevant to your own personal situation.

Anita Forrest
About Anita Forrest

Anita is a Chartered Accountant with over a decade of working with small business owners. She is the creator of the ‘Go Self Employed’ website, where she simplifies complicated self-employment topics such as taxes, bookkeeping, banking and insurance.