Don't forget to do your Self-Assessment Tax Return

Many people think that if the have not been asked to do a Self-Assessment Tax Return that they do not have to do one. This is not the case. Anyone who falls within any of the categories listed below should consider their tax position and if necessary take personal tax advice regarding their responsibilities.

Self assessment tax returns for:

• Taxpayers who receive any dividends in excess of £5,000 for 2016/17. The tax free amount is reduced to £2,000 for 2017/18.
• If you are a basic rate taxpayer and have received interest in excess of £1,000. If you are a higher rate taxpayer the tax free amount is only £500.
• Anyone in receipt of rental income. There is a relief for people who let a room in their own home, providing that the income is £7,500 or less. Additionally, a further relief was introduced in 2016/17 which allows rental interest of up to £1,000 to be not reported.
• If you receive any amounts from a trust or settlement. Generally speaking payments from trusts are likely to be made after deduction of tax, but the tax deductions may not necessarily equate to the personal liabilities of the recipients.
• If you have made capital gains in excess of the unused tax free amount (£11,100 for 2016/17 and £11,300 for 2017/18). Also if the proceeds from sales of capital assets exceed £44,000. You also need to do a return if you want to claim a capital loss or other relief. Non-residents who sell a UK residential property need to do a return, as does anyone claiming non-domiciliary status who claims remittance basis or someone who remits foreign capital gains from earlier years.
• If you want to claim relief for charitable donations, higher rate relief on pension contributions or work expenses not included in your tax code you may have to do a return.

There are circumstances where some taxable income and/or gains can be reported to HMRC, without the necessity to do a full tax return. Some things can now be reported online if you have set up a Government Gateway account. For instance, it has been possible from 6 April 2016 to report capital gains online.

Personal tax advice

The overall message is do not ignore tax purely because HMRC have not been in contact with you. Ignorance is never a valid excuse and failure to report income or gains could result in very heavy penalties and interest in the future.

However, if you are getting good self assessment tax advice, this can all be a relatively straightforward process! If you need any assistance please contact us.

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