The HM Revenue and Customs (HMRC), the government body responsible for collecting tax in the United Kingdom, requires people in the country to complete a self-assessment tax return if they don’t fit into the category of a conventional “employee”. People required to follow this tax guideline include self-employed individuals, company directors, and any person with the additional income that doesn’t get taxed through his or her employment.
The HMRC also requires people to get registered for self-assessment even if they earn more than a specific amount from different sources like property, investments, and savings. That’s not all; you will also need to complete a self-assessment tax return if your earnings from traditional employment cross £100,000.
An amendment was introduced to this tax rule in the 2012/13 financial year. Following that change, if an individual or his or her spouse earns £50,000 or more during a tax year, the person would need to return any Child Benefit received during that year through HMRC’s self-assessment system. This rule took effect on 7th January 2013.
If you fall in any of the above-mentioned categories, you will need to register yourself with HMRC by filling out a self-assessment form. After completing the registration procedure, you will receive a code referred to as the UTR or Unique Taxpayer Reference. You will need this code when filing your return.
The last date of registering for the previous tax year is 5th October of the current calendar year. HMRC allows both paper returns and online returns. If you are filing a paper return, you have to complete the process by 31st October. People making online submissions, on the other hand, get time till 31st January for filing their returns. Here, it must be noted that you must first register yourself for using HMRC’s online services if you want to file the return online.
The year 2012 saw the introduction of tougher penalties for tax defaulters. Even if you delay your filing just by one day, you will have to pay a penalty of £100. The penalties will keep on increasing over time. People who have registered themselves for completing self-assessment returns will have to complete it even if they don’t have any tax owing. If they don’t do so, they will have to pay a penalty. However, if you feel that your earnings during the current tax year will be less than what you earned during the previous tax year, you can request the HMRC to reduce your overheads on account accordingly.