Why Do You Need to Complete a Tax Return?

Why Do You Need to Complete a Tax Return? There are a number of reasons that HMRC expect you to complete a tax return, the main one being they know you have received income that you need to tell them about and maybe pay tax on. Here’s why you need to complete a tax return and what you need to do if you think you shouldn’t be doing one.

Most people do not need to complete a tax return because their employer handles all their tax calculations and payments on their behalf.

This is known as the ‘Pay as You Earn (PAYE) System’.

Others may be able to avoid completing a tax return because they:

  • Receive income of less than £1,000 like from eBay, babysitting, rent (the £1,000 Trading and Property Allowance);
  • Rent a room in their own home for less than £7,500 per tax year;
  • Have less than £1,000 for basic rate taxpayers or £500 for higher rate taxpayers in savings (Personal savings allowance);
  • Have a business HMRC classifies as a hobby.

If HMRC has sent you a request for a tax return then they probably think you are earning income that you need to pay tax on.  

That includes people who are:

  • Self-employed;
  • Landlords;
  • Receive dividends;
  • Receive bank interest;
  • A Company Director;
  • Earning more than £50,000 a year (or someone in their household is) and receive child benefit.

If you have received a request from HMRC to complete a tax return but feel you don’t meet the criteria to need to do so, call them on 0300 200 3310 to discuss your situation and ask if they can withdraw the return.

When Do You Need to Complete Your Tax Return?

The deadline for filing your tax return online is 31 January, following the end of the tax year. One return covers one tax year.  

A tax year runs from 6 April to 5 April.

So your 2018/2019 tax return is due by 31 January 2020.

There are strict penalties for failing to file your tax return on time, which can increase the longer you leave it. You may be able to appeal against penalties if you have a reasonable excuse.

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.