Do I need to complete a tax return?

Self-assessment is not just for self-employed people. If you fall under one of the following categories, you’ll need to complete a tax return too:

• You are self-employed or a company director
• You are a minister of religion or a Lloyd’s underwriter
• Your annual income is £100,000 or more
• You have income from letting any property or land you own
• You receive other untaxed income, or significant capital gains, and the tax due on it cannot be collected through a PAYE tax code
• You need to claim expenses or reliefs
• You or your partner receive Child Benefit and your income is over £50,000
• You receive annual income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income
• You have taxable foreign income, even if you are claiming that you are not normally resident in the UK
• You are a trustee

When should I start the application process?

Now, says Tina Riches, national tax partner at Smith & Williamson, an accountancy, investment management and tax group.

The deadline for paper returns was October 2015 so your only option is to submit it online but you can only do this if you have already registered for self-assessment.

As a general rule of thumb, 21 January is effectively the latest date to register with HM Revenue & Customs (HMRC) for the 2014/15 tax year, although the tax authority does not specify this date, says Riches.

This is because it can take at least seven working days for HMRC to send you an activation code by post. The deadline to submit your tax return is the 31 January, so you need to start the application as soon as possible.

Do not forget to activate your account. Normally you have to have activated the account within 28 days of receiving it; otherwise you have to request another one. In this case, you do not have 28 days.

Am I better off completing my tax return online?

Submitting it online means you get an automatic tax calculation and faster repayment if the taxman owes you anything.

And as an added bonus, if you have sent it in online before, HMRC fills in all basic details for you into your personalised tax return form. It reacts to your answers and removes all unnecessary sections.

There is also the relief of getting that reference number once you press submit. This leaves you free from worrying about whether or not your tax return is lost somewhere in the deep depths of snail mail.

Other top tips from Riches to complete the annual self-assessment tax return, include:

Get your paperwork in order:

• For the employed: you need a year-end form (P60) and leaver form P45 from any employers you had in the year (or if those are lost you can use your final payslip for the year from your employer(s) plus details of benefits in kind (P11D).
• If you have investments: details of share dividends, sales, losses, interest on bank accounts and any other investments.
• Rental property: you’ll need details of incoming receipts, expenses, capital gains and losses, and so on.
• Pension contributions: get confirmation of the amount you have contributed.
• Details of any payments under gift aid to charities – higher rate taxpayers can claim the higher rate relief on this.
• For the High Income Child Benefit Charge (HICBC): details of the child benefit received and knowledge of which partner has the higher income if over £50,000.

If you are missing some of the figures, make an estimate and explain your working. If you anticipate a drop in your self-assessment taxable earnings for the 2015/16 tax year, you can claim a reduction in your payment on account.

Keep a record of your completed form and associated paperwork. If you are in a business, for example you are self-employed, this will be for a further five years, so up until 31 January 2021. Otherwise, you must keep the paperwork until 31 January 2017.

Be aware of recent changes in law

Watch out for recent changes in the law which affect 2014/15 tax returns. If you have been moving in and out of the UK ensure you are aware of the statutory residence test rules.

Be alert to online fraudsters who send ‘phishing’ emails

At this time of year there tends to be a spike in ‘phishing emails’ which appear to come from HMRC. In the last 18 months, it has closed more than 22,000 fake websites so make sure you go to the gov.uk site to find the right place to file your return. HMRC says it will never send an email with a link to the software to complete your return, so do not click on links in phishing emails that appear to come from HMRC.

Non-doms should count their tax years carefully

Mark Davies, managing director and founder of Mark Davies & Associates, says many non-dom clients are stating on their self-assessment form that they are not eligible to pay the remittance basis payment, having miscounted the tax years they are resident here.

He says: “HMRC count years where you were resident for only part of the tax year, and where you are resident in the UK but also technically resident somewhere else. It seems HMRC is doing a systematic check so anyone who is in doubt should take advice or face a costly enquiry where interest and penalties may fall due.

“In addition, many non-doms intending to file their tax returns on line using the HMRC’s software may find that the residency and domicile pages cannot be submitted online. This means that they will either have to submit a paper return and face a £100 fine or seek professional help.”

Get help

If you are not sure about something, get help. This may be available from specialist tax advisers and accountants, voluntary organisations that deal with those on low incomes or HMRC itself – although you can no longer visit an enquiry centre you can join an HMRC online chat session.

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