I don’t know if I need to complete a Tax Return

Help with your Tax Return guide

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HM Revenue and Customs sends Tax Returns to everyone in the Self-Assessment system in April / May every year. If you receive a tax return you must complete it and return it to HMRC. This is so even if you are an employee and all your income is taxed under PAYE, unless, exceptionally, from 2010/11, you have grounds for asking for the tax return to be withdrawn – see below. If you have not received a tax return and think you need to complete one, please read the following information to check whether or not you need to complete a return and how to get one.

New rules from April 2013 mean that you will usually have only two years from the end of the tax year in which to ask for a return to be withdrawn, so don’t delay. If there are exceptional factors, you are on low income and you need longer, ask TaxAid for advice.

Asking HMRC to withdraw a tax return

From 2010/11 onwards, if you consider that you do not need to submit a tax return, for example because all your income is taxed under PAYE, you can phone HMRC on 0300 200 3310 /0845 900 0444 and ask for the tax return to be withdrawn. If HMRC agrees, this will means that you no longer have to file a return and any penalties issued for missing the tax return filing deadline will be set aside.

Do you need to complete a Tax Return?

Most taxpayers in the UK are taxed at source and so do not need to complete a Self Assessment Tax Return. ‘Taxed at source’ means that the money you receive has already had tax taken off, such as the wages you get from your employer when paid under the Pay As You Earn (PAYE) system, or UK bank interest taxed at source.

People who have income that has not been taxed at source, or not taxed at the correct rate, and on which tax is due are required to inform HM Revenue & Customs about the income within 6 months of the end of the tax year in which the income is received (that is by 5 October following the end of the tax year). HMRC will then send a tax return for you to complete.

Such income would include, for example, rental income, self-employed income, savings income for higher rate taxpayers, and occasional untaxed income like eBay sales.

(If you are unsure if your eBay activity is taxable, see http://www.hmrc.gov.uk/guidance/selling/badges.htm).

You also need to tell HMRC about taxable chargeable gains – http://taxaid.org.uk/info/capital-gains-tax.

For more details on the HMRC website, see ‘Do you need to complete a tax return?  http://www.hmrc.gov.uk/sa/need-tax-return.htm and  ‘Introduction to self assessment’ http://www.hmrc.gov.uk/sa/introduction.htm

If you are an employee or pensioner and think you may have paid too little tax under PAYE, you will normally be able to resolve this without the need for tax returns. You should contact HMRC by phone on0300 200 3300 / 0845 300 0627. It is best to resolve the matter without the issue of tax returns. This is becasue there are strict submission deadlines for tax returns and you could accidentally end up paying  penalties and interest in addition to any tax due.

Tax Refunds

If you are due a tax refund, completing a tax return is unlikely to be the best route. Instead, you should submit a repayment claim form, or, for overpayments of tax under PAYE, simply write to the tax office. See http://www.hmrc.gov.uk/incometax/refund-reclaim.htm.