Do I have to submit a tax return?

Do I have to submit a tax return?

20 January 2017

With little more than a week to go before the self-assessment tax deadline hits, it is worth double-checking whether or not you have to submit a tax return.

If you have to send a tax return and you miss the 31st January deadline then you will be penalised. If your tax return is less than three months late then you’ll have to pay a fine of £100, but this figure can rise quickly if you submit a return after three months or you pay your tax late.

For certain groups like company directors, it is pretty obvious that you will have to pay. But there are some complicated rules that you might not have taken into account.

If you are an umbrella contractor with Umbrella.co.uk, then as a rule of thumb you won’t have to submit a tax return, but there are some circumstances that may contradict that. 

Who has to do self-assessment? 

Doing your tax return is called self-assessment. For most people, including employees and umbrella contractors, tax is deducted automatically from wages, pensions and savings.

Individuals and businesses with other forms of income have to report this in a tax return.

You will have to submit a tax return by January 31 if, between 6 April 2015 and 5 April 2016, any of the following applied:

  • You were a company director - unless it was for a non-profit organisation (such as a charity) and you didn’t get any pay or benefits, like a company car.
  • You were self-employed and can deduct allowable expenses from your pay. 

You also need to submit a tax return if you have more than £2,500 additional untaxed income such as: 

  • Rental property income
  • Savings income
  • Investment income 

If you have untaxed income that is below £2,500 then you should contact HMRC and they will be able to advise you on what to do.

You also need to submit a tax return if you had more than £10,000 in savings and investments before tax or if you made profit from selling things like shares or a second home and you need to pay capital gains tax.

There are a number of other, lesser known caveats that could mean you need to submit a tax return. You need to file your taxes if:

  • Your income (or your partner’s ) exceeded £50,000 and you claimed Child Benefit.
  • You had income from abroad that you need to pay tax on.
  • You lived abroad and had income in the UK.
  • You got dividends and you’re a higher or additional rate tax payer (if you don’t need to file a return for any other reason then contact HMRC).
  • Your income was over £100,000 last tax year.
  • You were a trustee of a trust or pension scheme.
  • HMRC has contacted you and told you to pay tax (be warned that a popular email scam sees scammers pose as HMRC and request money from you – double check with the HMRC helpline if you are unsure).
  • HMRC has sent you a P800 saying that you didn’t pay enough tax. 

You will also need to pay if you belong in either of the following groups:

  • Lloyd’s underwriter
  • Religious minister

If you fall into any of the above categories, or HMRC has told you that you have to submit a return, then you must send one – even if you don’t have any tax to pay.

If you are unsure about your situation then please call a member of the Umbrella.co.uk team. We can also provide last minute help if you need to submit a tax return quickly. Call: 0800 121 6513.