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September 19, 2013

Do You Need to Submit a Tax Return?

The self-assessment system means that it is the taxpayers obligation to register for tax returns with HM Revenue and Customs - but who needs to submit a tax return?

Who Needs to Submit a Tax Return

The tax rules state that all persons chargeable to income tax or capital gains tax that have not been issued a notice to submit a tax return by HMRC must notify their liability to tax unless certain exceptions apply (broadly speaking that all income is subject to PAYE or they are only subject to income tax at the basic rate).

However it is perhaps easier to consider the occasions where a person may be required to notify HMRC and submit a tax return:

- You dispose of assets resulting in a liability to capital gains tax (note - the disposal of a persons main home may be exempt from CGT and may not therefore need to be disclosed to HMRC on a tax return)

- You are self-employed

- You receive untaxed income, such as rental income or bank interest received gross

- You receive income of more than £100,000 as you may be subject to a reduction in the personal allowance and higher/additional rate tax that is not collected through PAYE

- You/your partner earn more than £50,000 and receive child benefit (you could be liable to the child benefit high income charge)

- You need to claim expenses or reliefs (for example employment expenses or relief for higher rate relief for pension contributions)

- You wish to utilise tax efficient investments such as the Enterprise Investment Scheme (EIS) or the Venture Capital Trusts (VCT)

- You have foreign income

- You receive income from a trust or estate

- You live or work abroad as you may need to consider your UK residence status for tax purposes (note - a new statutory residence test came into effect from 6 April 2013)

- You are non domiciled in the UK and claim the remittance basis of taxation

Note - trustees and personal representatives of deceased estates may also need to submit tax returns.

How to Register for Self-Assessment Tax Returns

Taxpayers required to submit a tax return should contact HMRC, normally by submitting form SA1.

The deadline for notifying HMRC of the obligation to submit a tax return is 5 October following the end of the relevant tax year - therefore for the tax year 2012/13 the deadline of 5 October 2013 is fact approaching.

Where taxpayers fail to notify of a tax liability by the due date they may be liable to HMRC penalties.

In subsequent years HMRC should automatically issue a self-assessment tax return unless the taxpayers circumstances change and they are no longer required to self-assess.

Should I Use a Tax Agent?

Tax agents can assist with all aspects of the tax return procedure including: registering for self-assessment, submitting tax returns, reviewing PAYE codes, checking HMRC statements and corresponding with HM Revenue and Customs on your behalf.

As a tax agent PD Tax Consultants can; correspond with HMRC on your behalf, check PAYE codes and HMRC statements and assist with the preparation and submission of tax returns.  We also provide tax planning and advice.

If you would like to discuss your 2012/13 tax return please call Paul Davison or Vikki Elliott on 0113 887 8432.


Contact us today to discuss your tax requirements.
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