You need to fill in the self-assessment tax return and pay income tax in the following cases:
1. YOU ARE SELF EMPLOYED
If you are running a business and you get an income through dividends you will have to submit annual self-assessment tax return. The reason is that since this income is not taxed at source like your wages you will need to declare this in your annual self-assessment tax return and pay the tax on it.
2. INCOME
If your income is more than £100 000 per year before tax or if your annual income from savings or other investments such as shares is £10 000 or more before tax.
3. FOREIGN INCOME
You are a UK resident and you have a foreign income. There is an exemption to this rule: if the foreign income is in the form of dividend and it is less than £300 you don’t have to declare it. So If you have any foreign income you should first establish if you are UK resident, or a UK non- resident. You will also have to figure out where you are domiciled. This will help determine the tax implications on your foreign income.
4. YOU SOLD AN ASSET AND YOU PAID CAPITAL GAINS TAX
If you have sold an asset and which was worth £49,200 or more in the tax year 2020/2021 or your asset might be valued less but you made a gain of £12300 which is the threshold and also In case you sold the asset and it made a loss but there are other gains as well and the net that means (gain – loss)is more than the exemption of £ 12, 300. In all the cases you will have to register for the Self-Assessment tax return and pay CGT.
5. IF YOU ARE A TRUSTEE
If a trust is established with some income generating assets such as shares and you are appointed its trustee you need to declare it in the self-assessment tax return.
This is not an exhaustive list and there are many other cases in which you might need to fill in your self-assessment tax return.
By filing the self-assessment tax return you are telling HMRC that you have some untaxed income on which you are supposed to pay tax. You can also register for self-assessment if you have any reliefs to claim.
It is always a good idea to submit your self-assessment tax return early. In this way it can be processed quickly and if you are to get any relief you can get it quick. There is also a less chance that you get a penalty. Once you have submitted and paid early you will have a much better idea of your finances and cash flows as well.
We at Taxaccolega, can help you with your self-assessment tax returns. Simply call us at 020 8127 0728 and we can sort out the things for you. In case you have some untaxed income in the tax year 2019/ 2020 , the deadline to submit the self-assessment tax return in Jan 2021 and you must have registered for self-assessment latest by 5 Oct 2020 otherwise you can get penalties.