PLEASE NOTE: The charity TaxAid advises only those people on low incomes whose problems cannot be resolved with HMRC.

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 – or a notice to file on-line – to everyone in the Self-Assessment system in April / May every year.

If you receive a tax return, or a notice to file on-line, you must complete a return and submit it to HMRC. This is so even if you are an employee and all your income is taxed under PAYE.

The only exception to this rule is where you have grounds for asking for the tax return to be withdrawn – see below.

You may not receive any paper communication from HMRC telling you to file a return. Instead, you may be alerted by email that you need to file a return. This should only happen if you signed up to HMRC’s digital self-assessment email reminders service.

If you have not received a tax return, but think you need to complete one, please read the section below entitled ‘Do you need to complete a tax return?’.

Asking HMRC to withdraw a tax return

If you think you do not need to submit a tax return, for example because all your income is taxed under PAYE and you have no additional tax liability, you can phone HMRC on 0300 200 3310 and ask for the tax return to be withdrawn. If HMRC agrees, this will means that you no longer have to file a return.

You can ask for a return to be withdrawn even after late filing penalties have been charged.  If HMRC agrees, you will not need to file the return and any penalties issued for missing the tax return filing deadline will be cancelled.

You will usually have only two years from the end of the tax year for which the return is due, in which to ask for a return to be withdrawn.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 If there are exceptional factors, you are on low income, and you need tax returns to be withdrawn for a number of years, ask TaxAid for advice.

HMRC will not normally withdraw a return if you have been self-employed at any time during the tax year – even if it was only for a short time and there is no tax owing.

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 six 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 you a notice to file a tax return, either by post or electronically.

Such income would include, for example, rental income, self-employed income, savings income over the savings allowance, and occasional untaxed income like eBay sales or casual freelance earnings.

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.

There is some information on self assessment on the HMRC pages of the Gov.uk website.

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 on 0300 200 3300. It is best to resolve the matter without the issue of tax returns. This is because 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 contact HMRC. There is some information on the option on the Gov.uk website.