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The Ultimate Guide to Completing Your Tax Return

Tax Return

Tax returns are an important part of financial responsibility, but they can also be complex and time-consuming to complete. Filing a tax return is a requirement for many individuals and businesses in the UK. It is a way for the government to collect taxes on income and other sources of revenue.

First, it ensures that you pay the correct amount of tax. If you do not file a tax return, you may be fined or even charged with a criminal offense. Second, filing a tax return can help you claim certain tax credits and deductions, which can reduce your tax bill. Third, filing a tax return can create a financial record of your income and expenses, which can be helpful for things like applying for a loan or getting a mortgage.

What is a tax return?

A tax return is a form that you use to tell HM Revenue and Customs (HMRC) about your income and other gains for the previous tax year. You used to tell the government about your income and other financial information for the previous tax year. The government uses this information to calculate how much tax you owe.

You may also need to use a tax return to claim tax credits, deductions, or other benefits.
Tax returns differ for individuals like the self-employed and employed, playing a vital role in maintaining tax system transparency and accountability. You can file your tax return electronically or on paper. Electronic filing is generally faster and more convenient, and it is also more likely to be error-free.

Who needs to file a tax return?

In the United Kingdom, individuals who meet the following criteria are required to file a tax return:

Self-employed individuals: If you are self-employed and earn more than £1,000 in a tax year, you are required to file a tax return. This includes individuals who are sole traders, partners in a partnership, or directors of a limited company.

Individuals with untaxed income: If you have any income that is not taxed automatically through the Pay As You Earn (PAYE) system, you will need to file a tax return. This includes income from savings, investments, rental property, and foreign income.

Individuals with high income: If your total taxable income is more than £100,000, you will need to file a tax return. This includes individuals who earn income from employment, pensions, and other sources.

Individuals who receive a notice to file a tax return: If you receive a notice to file a tax return from HMRC, you are legally obligated to do so, even if you do not meet any of the other criteria listed above.

If you are unsure whether or not you need to file a tax return, it is always a good idea to check with HMRC. You can use their online tax return checker or call them at 0300 200 3310.

The deadline for filing a tax return

The deadline for filing a tax return varies depending on the country or jurisdiction. In the United Kingdom, the deadline for filing a tax return is January 31, following the end of the relevant tax year. For example, the deadline for filing a tax return for the tax year 2022-23 is January 31, 2024.
If you miss the deadline for filing your tax return, you will be charged a penalty. The penalty is £100 for the first three months that you are late, £300 for the next three months that you are late, and £500 for each six-month period that you are late after that.

If you are unable to file your tax return by the deadline due to extenuating circumstances, you can apply for a late filing penalty payment. However, you must have a valid reason for not filing your return on time. If you are unsure of the deadline for filing your tax return, you can check with HMRC or a tax advisor.

 

How to file tax return

How to file a tax return

Here’s a step-by-step guide on how to file a tax return online in the UK:

1. Gather your documents: Before you start, gather all the necessary documents you’ll need, such as your P60 form from your employer, your P11D form for any benefits you received, and receipts for any expenses you’re claiming.

2. Create a Government Gateway account: If you don’t already have one, you’ll need to create a Government Gateway account. This is a secure online platform where you can access various government services, including filing your tax return.

3. Sign in to your Government Gateway account: Once you have an account, sign in using your email address and password. You’ll also need your Unique Taxpayer Reference (UTR) number, which you can find on your P60 form or by contacting HMRC.

4. Select the ‘File a Self Assessment Tax Return’ service: From the Government Gateway homepage, select the ‘File a Self Assessment Tax Return’ service. This will take you to the online tax return form.

5. Enter your personal information: Start by entering your personal information, including your name, address, date of birth, and National Insurance number.

6. Review and amend your income details: The online form will pre-populate some of your income details based on information HMRC has received from your employer or other sources. Review this information carefully and make any necessary amendments.

7. Enter your deductions and allowances: You can claim various deductions and allowances to reduce your taxable income. These may include things like mortgage interest payments, charitable donations, and pension contributions.

8. Calculate your tax liability: The online form will automatically calculate your tax liability based on your income, deductions, and allowances.

9. Review your tax calculation: Review the tax calculation carefully to ensure it is accurate. If you have any questions, you can contact HMRC for assistance.

10. Pay your tax bill: If you have a tax bill to pay, you can do so online using your credit or debit card. You can also choose to pay by direct debit or by post.

11. Submit your tax return: Once you have reviewed all the information and paid your tax bill (if applicable), you can submit your tax return. The deadline for submitting your return is usually January 31, following the end of the tax year.

Remember to keep copies of your tax return and all supporting documents for at least seven years.

 

What happens if you miss the deadline for filing a tax return?

Missing the deadline for filing a return can have several consequences, including:

Late filing penalties: You will be charged a late filing penalty for each month you are late in submitting your return. The penalty is £100 for the first three months, £300 for the next three months, and £500 for each six-month period thereafter.

Interest on unpaid tax: If you owe tax and miss the deadline for paying it, you will be charged interest on the unpaid amount. The interest rate is 6% per year, calculated daily.

Further penalties: In more serious cases, you may be charged additional penalties, such as a failure to take reasonable care penalty or a deliberate non-compliance penalty. These penalties can be significant, reaching up to £10,000 or more.

Criminal prosecution: In extreme cases, failing to file a tax return or pay your tax bill could lead to criminal prosecution. This is rare, but it can happen if you have deliberately evaded your tax obligations.

Damage to your credit rating: A late return or unpaid tax bill can damage your credit rating, making it more difficult to borrow money or obtain credit in the future.

It’s important to note that these are just potential consequences of missing the deadline for filing a tax return. The specific penalties you may incur will depend on your individual circumstances and the extent of your late filing.

To avoid these negative consequences, it’s crucial to file your return on time or seek an extension if you have a valid reason for not being able to meet the deadline. You can file your return online through the Government Gateway or by post using a paper form.

If you have any concerns about your tax return or the deadline, you can contact HMRC for assistance. They can provide guidance and help you ensure you meet your tax obligations

What if you don’t agree with your tax return assessment?

If you disagree with your tax return assessment, you have the right to appeal to Her Majesty’s Revenue and Customs (HMRC). The appeal process allows you to challenge HMRC’s decision and have your case reviewed. Here are the steps on how to appeal your tax return assessment:

1. Review your tax notice: Carefully review the tax notice you received from HMRC, which outlines the assessment you disagree with and the reasons for their decision.

2. Identify the grounds for appeal: Determine the specific reasons why you disagree with HMRC’s assessment. This could be due to incorrect calculations, unallowed deductions, or misinterpretations of your circumstances.

3. Gather supporting evidence: Collect any documentation or evidence that supports your claim, such as receipts, invoices, or other relevant paperwork.

4. Contact HMRC: Notify HMRC of your intention to appeal. You can do this online through your Government Gateway account, by calling their helpline, or by writing a letter.

5. Complete an appeal form: HMRC will provide you with an appeal form, which you will need to complete and submit along with your supporting evidence.

6. Provide a detailed explanation: In your appeal form, provide a detailed explanation of why you disagree with HMRC’s assessment, outlining your grounds for appeal and supporting your claims with evidence.

7. Submit your appeal: Submit your completed appeal form and supporting evidence to HMRC within the specified timeframe, usually 30 days from the date of your tax notice.

8. Await HMRC’s response: HMRC will review your appeal and provide you with a formal response, which may include an updated assessment or an explanation of why their original decision stands.

9. Further options: If you are still unsatisfied with HMRC’s response, you can request a review by the Independent Tax Tribunal. This is a formal independent review process where a tribunal panel will consider your case and make a decision.

Remember, the appeal process can take time, so it’s important to start early and gather all the necessary evidence promptly. If you need assistance with your appeal, you can consider seeking professional advice from a tax advisor or accountant.

 

Frequently Asked Questions

How do I get my tax refund UK?
You’ll automatically get the check by post.

What is a UK tax return called?
The main tax return (SA100)

What is the average UK tax return?
The average amount owed to UK taxpayers by HMRC has increased by 6.2%, with the average tax rebate now reaching £1,510.

How much is VAT refund in UK?
20% VAT rate

 

Conclusion

Filing a tax return is an important responsibility for individuals and businesses in the UK. By understanding the deadlines, penalties, and appeal procedures, you can ensure that you meet your tax obligations and avoid any unnecessary complications. Remember to gather your documents, file on time, and seek assistance if needed.