A UK Personal Tax Return provides details of your income and any tax due, such as employment, self-employment, savings, pensions or capital gains. HMRC suggests filing online but paper forms are also accepted if necessary.
If you earn income or capital gains that require reporting, HM Revenue and Customs (HMRC) requires that a Personal Tax Return form is filled out each year in order to report them.
Tax on UK Personal Tax Returns will depend on both your income and circumstances. Employed people usually get taxed through Pay As You Earn (PAYE).
However, if you are self-employed or earn income from sources not covered by PAYE, HMRC requires that a UK Personal Tax Return be filed annually in order to calculate how much tax is due from you.
Your tax return must be filed no later than 31 January following the end of the tax year if filing on paper and 31 October for those using electronic filing systems, respectively. There are penalties associated with late filing so it’s wise to file early to avoid penalties.
Self-assessment
Filling out this form can either be done online using tax software, or manually with pen and paper. Either way, the process can be either straightforward or time-consuming depending on the nature of your business and sources of income.
Self-Assessment returns can be daunting and stressful, yet planning can make the experience far less overwhelming. Procrastinate no more; plan in advance! Doing this will make filing much less of an ordeal.
Make sure that all necessary documents and records are ready before beginning to complete your Self-Assessment online, such as your Unique Taxpayer Reference number (UTR), National Insurance numbers and employer references (if available).
Keeping good records
A major part of self-assessment is ensuring that your business’s finances are clear and accurate. In order to avoid costly mistakes, it’s best to keep accurate records throughout the year – especially for purchases that will affect your overall tax liability.
Keep copies of all bank accounts and paperwork so that HMRC can verify your income and expenses are correct if they need to.
The Self-Assessment form enquires into your personal details and sources of income or gains such as employment, self-employment, properties, investments or trusts as well as gains made overseas.
Self-employed
Self-employed individuals in the UK must file their annual tax return by 31 January to pay any outstanding taxes owed. While it can be daunting, making filing your return a priority sooner rather than later can help ensure any potential tax debt is resolved promptly.
For those who are newly self employed, step one is to obtain an unique taxpayer reference (UTR), so they are aware that your business exists and allow you to file returns online.
To calculate taxable profit, you need to add all the earnings that were realized during a tax year before any expenses had been deducted – this figure is known as your turnover.
Untaxed income
If you received untaxed income from investments, land or property or made capital gains in the tax year then Revenue & Customs (HMRC) requires you to complete a tax return in order for them to assess how much tax is due on them.
Penalties
HMRC may charge penalties for noncompliance with UK Personal Tax Returns. These could result from careless errors, intentional tax evasion or fraud schemes or simply being tard in filing one’s return.
Telling HMRC of any mistakes before they find them could reduce penalties significantly and can help calculate what additional taxes owe and offer advice to improve recordkeeping practices.
HMRC can cancel a penalty on appeal if you can demonstrate you have a good reason for late filing – for instance due to illness, severe injury or other personal difficulties which prevented you from meeting your tax obligations on time.
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