Tax returns have an impact on two main things: figuring out how much tax you need to pay or get back, and giving HMRC the information it needs to collect taxes . When you report your income and deductions, you help the UK’s tax system to stay accurate.
However, filing your tax return isn’t always the easiest thing to keep on top of as well as running your business.
Here at Figures UK, we’ve created a guide to simplify it for you!
Key Dates and Deadlines for UK Tax Returns
Sticking to tax return filing deadlines is key to stay clear of fines and possible legal trouble. Here are the important dates you need to remember:
- Tax Year: The UK tax year starts on April 6th and ends on April 5th the next year.
- Self-Assessment Tax Return Deadline:
- Paper tax returns: October 5th (for the tax year that just ended)
- Online tax returns: January 31st (for the tax year that just ended)
- Payment Deadlines:
- Balancing Payment: January 31st (for the tax year that just ended)
- Payment on Account: July 31st (for the current tax year)
Make sure to jot down these dates in your calendar and plan ahead. This way, you’ll be ready to file and pay your taxes on time.
Important Documents for Your Tax Return
To fill out your tax return , you need to gather the right paperwork. Here’s a list of key documents you should have:
- P60: Your employer, if relevant, gives you this form. It shows how much you earned and the tax they took out during the tax year.
- P11D: This paper lists any perks or costs your employer covered, like company cars, health insurance, or travel expenses.
- Interest Statements: If you have money in savings accounts or investments, you’ll need papers that show how much interest you made.
- Rental Income and Expenses: If you rent out property, you’ll need to give details about the rent you got and the costs that go with it.
- Self-Employment Records: Self-employed individuals must keep precise logs of their earnings and costs. This includes invoices, receipts, and bank statements.
- Pension Contributions: Information about any personal payments you’ve made to your pension over the tax year.
- Charitable Donations: Documentation of your donations to charity, as these might qualify you for tax breaks.
Getting your papers in order ahead of time will make doing your taxes easier and help you have all the info you need right at hand.
Income You Need to Report
When you file your taxes, you need to list all the money you made, no matter where it came from or how much it was. Here are some common ways people make money that you might need to report:
- Employment Income: Your salary, bonuses, commissions, and other money from your employer count as this type of income.
- Self-Employment Income: Self-employed people need to report their business earnings. This covers money from freelance work, consulting, or other self-employed tasks.
- Rental Income: If you get money from renting out a property, you must list this income on your tax return.
- Investment Income: This includes interest your savings accounts earn, dividends your stocks or shares pay, and other money your investments generate.
- Pensions: You must declare income from a private or state pension on your tax return.
- Other Income: This group covers additional income sources. Examples include money from royalties, wins from gambling, or earnings from trusts or estates.
Not reporting all your income can lead to fines and possible legal trouble so make sure you’re careful and exact when you tell the tax office what you’ve earned.
Tax Breaks You Might Be Able to Get
The UK tax system has many ways to lower your taxable income and, as a result, the amount of tax you have to pay. Here are some common tax breaks you might be able to use:
- Personal Allowance: Everyone gets a tax-free allowance. How much you get depends on your age and how much you earn.
- Pension Contributions: You can ask for tax relief on money you’ve put into your personal pension over the tax year.
- Charitable Donations: When you give money to official charities, you might get tax relief. This can happen through Gift Aid or by asking for a deduction when you file your taxes.
- Employment Expenses: If you spend your own money on things you need for work, like joining professional groups or traveling for your job, you might be able to get some of that money back on your taxes.
- Self-Employment Expenses: Self-employed individuals can subtract valid business costs from their taxable income. These costs may include office rent, equipment, or money spent on ads.
- Rental Expenses: People who earn money from rentals can deduct costs linked to keeping up and running the rental property. This might cover repairs, insurance, and interest paid on the mortgage.
You need to take a close look at the rules for each deduction and allowance you can claim. Make sure you keep good records to back up what you’re claiming.
How to File Your Tax Return Online
These days more and more UK residents choose to file their taxes online. HMRC has a secure online system called Self-Assessment that makes it easy to submit your tax return. Here’s a guide to help you file your tax return online:
- Register for Self-Assessment: Sign up for Self-Assessment with HMRC if you haven’t yet. This step takes about 10 working days, so make sure to plan ahead.
- Gather Your Documents: Collect all the papers and info you need about your income, deductions, and allowances, as we talked about earlier.
- Log in to Your Account: Head to the HMRC website and sign in to your Self-Assessment account using your Unique Taxpayer Reference (UTR) and password.
- Complete the Online Form: Follow the steps in the online form. It’ll ask you to put in your income, deductions, and other important details.
- Review and Submit: After you fill out the form, take a good look at all the info to make sure it’s right before you send in your tax return.
- Pay Any Outstanding Taxes: If you still owe taxes, you need to pay them by the due date to steer clear of any fines.
Doing your taxes online has many useful perks; You get instant calculations, automatic error checks, and the chance to save and come back to your return when you need to.
Common Mistakes to Avoid When Doing Your Taxes
When you’re working on your tax return, you need to keep an eye out and steer clear of common slip-ups that could get you in trouble or make things more complex. Here are some usual traps to watch out for:
- Wrong Personal Details: Check your name, address, and other personal info to make sure they’re right.
- Math Mistakes: Look over your numbers for tricky deductions or allowances.
- Left-out Info: Make sure you’ve put in all the important details and paperwork to avoid HMRC asking questions or slowing things down.
- Wrong Tax Codes: Check that you’re using the right tax codes for your job or self-employment income.
- Missed Due Dates: If you don’t file or pay on time, you might have to pay extra fees and interest.
- Claiming Ineligible Deductions: Take a close look at the rules for any deductions or allowances you plan to claim. This helps you steer clear of possible fines.
If you double-check your tax return and stay on top of things, you’ll cut down on mistakes and have an easier time filing.
Professional Help: When to Think About Getting a Tax Advisor
While lots of people file their taxes on their own, sometimes it’s a good idea to get help from a tax advisor, or accountant, like us!
Here are some times when you might want to hire one:
- Complex Tax Situations: Tax advisors can help you if you earn money from different places, run a business, or deal with tricky money matters. They make sure you follow all the rules.
- Big Life Changes: When big things happen in your life – like getting married, getting divorced, getting an inheritance, or buying or selling a house – they can affect your taxes. A pro can walk you through these effects.
- Working for Yourself: If you work for yourself, a tax advisor can show you what expenses you can write off and what you’re allowed to claim. They can also give you ideas on how to plan your taxes.
- Expatriates and Non-Residents: Tax rules often confuse people who have lived or worked abroad. A tax advisor can help you follow UK and international tax laws .
- Tax Planning and Optimisation: A tax advisor can give you useful tips and methods to lower your tax bill and make the most of your money situation.
Bringing a tax advisor on board might cost you extra, but the money you could save and the stress you could avoid can make it a smart move. This is true when you’re dealing with tricky tax situations or when there’s a lot at stake.
FAQs About UK Tax Returns
To address some common questions and concerns, here are frequently asked questions (FAQs) about UK tax returns:
- Q: Do I need to file a tax return if I’m an employee?
If you’re an employee and your only source of income is from employment, you may not need to file a tax return if your tax has been correctly deducted through the Pay As You Earn (PAYE) system. However, there are exceptions, such as if you have additional sources of income or claim certain deductions or allowances.
Q: What happens if I miss the tax return deadline?
Missing the tax return deadline can result in penalties from HMRC. The initial penalty is £100, and additional penalties may apply if the return is still outstanding after three months.
Q: Can I amend a tax return I’ve already submitted?
Yes, you can amend a tax return you’ve already submitted by notifying HMRC and providing the correct information. However, it’s essential to do so promptly to avoid potential penalties.
Q: How far back can HMRC investigate my tax affairs?
HMRC typically has the power to investigate tax affairs up to four years after the end of the relevant tax year. However, in cases of suspected fraud or negligence, the investigation period can be extended to up to 20 years.
Q: Can I file a joint tax return with my spouse or partner?
Unlike some other countries, the UK does not have a system for joint tax returns. Each individual must file their own tax return, even if they are married or in a civil partnership.
Q: How long should I keep my tax records?
It’s recommended to keep your tax records for at least six years from the end of the relevant tax year, as HMRC may request to see them during an investigation or inquiry.
Remember, these FAQs provide general guidance, and it’s always advisable to seek professional advice if you have specific questions or concerns regarding your tax situation.
Final Checklist
Doing your taxes might seem tough, but if you prepare well and pay attention to the details, it’s not that hard. If you stick to the key steps we’ve talked about in this guide, you’ll find it easier to file your taxes and without hassle.
Here’s a quick list to help you stay on top of things:
- Get all the papers you need (P60, P11D, interest statements, rental income/expenses, self-employment records, pension contributions, and charitable donations).
- Find out where all your money comes from (jobs, self-employment, rent, investments, pensions, and other sources).
- Look at what you can deduct and claim (personal allowance, pension contributions, charitable donations, job expenses, self-employment costs, and rental expenses).
- Sign up for Self-Assessment (if you haven’t already).
- Fill out the online tax form and .
- Go over your tax return to check for mistakes or missing info.
- Hand in your tax return on time.
- Pay any taxes you owe by the due date.
- Hold on to your tax return copies and backup papers for at least six years.
By sticking to this full checklist and the advice given in this article, you can handle the tax return process with confidence and meet your duties as someone living in the UK.
If you find taxes too much to deal with or have tricky tax situations, think about getting help from a professional. At Figures UK, we give personal tax planning and preparation services to help you get the most deductions, stay accurate and compliant.
Jason Cannon
Managing Director and Figures UK Founder
No matter the size of your business, whether you’re a sole trader or a Limited company, when it comes to accounting, it can be a little confusing to say the least.
That’s where we come in. We’re on hand to listen, advise and provide our expert support.
You can find lots more useful information in our blogs below or get in contact with us.
