2013/14 Self-Assessment Returns need to be filed with HMRC by 31 January 2015 to avoid being penalised
With Christmas and New Year a distant memory now, attention turns to the 31 January 2015 deadline for self-assessment tax returns in relation to income and gains in the year 6th April 2013 to 5th April 2014. Any personal tax owing also needs to be settled by this date. If the tax return is filed after the end of January, you will face an automatic penalty of £100 issued by HMRC, which will increase if the return is delayed further.
How do I know if I need to submit a tax return?
There are also various circumstances where you would need to complete a tax return and these include:
- Being a Director of a limited company
- Being self-employed as a sole trader
- Renting out property
- If you receive child benefit allowance and one member of the household earns £50,000 a year or more
We will be able to advise whether you need to complete a tax return and assist in preparing it for you. You need to register for self-assessment first before a tax return can be submitted to HMRC and this registration can take a few days to process. Once registered, HMRC issue you with a Unique Tax Reference (UTR) and access to the online filing ‘gateway’ both of which are needed to submit a return. A tax return cannot be submitted without the UTR but this can be requested from HMRC if you have previously registered and not got this to hand. Also, if you do not have the online filing gateway set up with HMRC, we are able to file the tax return for you directly without the gateway login details.
Ask your accountant if you are at all unsure.
What needs to be included on a Self-Assessment Tax Return?
Financial information in relation to your income needs to be included on a self-assessment tax return. Such information and where to find it includes the following-
- Dividends received during the period – if you own your own limited company, or if you hold shares in other firms. Your accounts will provide this information for your own company, or you should have dividend vouchers with the relevant gross dividend information on for both your own company and dividends received from investments.
- Salary – if you were employed either by your own limited company or by another employer during the period. This can be found on your P60 (received form your employer at the end of each tax year), or your P45 (received from your employer when you leave their employment)
- Benefits in kind received through your employment, such as healthcare or a mobile phone. This information can be found on your P11D form, again received from your employer once a year.
- Self-employment income – if you were a sole-trader business. You will need your annual accounts to identify the profit figure required.
- Rental property – if you have received income from renting out a property. You will need to declare the rental income, perhaps shown on statements received from your agent if you use one. You are also able to claim certain costs against this income when submitting the return, such as: mortgage interest paid (not the capital element of any repayment), agent’s fees, insurance, any utilities paid by you as the landlord (not any paid by the tenants) and a 10% wear and tear allowance for furnished properties.
- Interest – if you receive interest on savings (but not ISAs). You’ll need your bank or other investment statements for this.
- Pension contributions – if you contributed into a personal (not occupational) pension, these contributions can offset some of your income and reduce your tax bill. You should have a statement from your pension provider, which show the amounts you have paid.
- Gift aid donations – if you’ve made any charitable donations and claimed gift aid. Again, this will reduce your tax bill.
What if I can’t find the information
It is best to keep all the above records in one place during the year and get them together before you start completing your tax return. However, life isn’t like that and if you can’t find the right document with the information on but you know you have received some income, it is better to make the best estimate you can and include this. There is space on the return for you to tell HMRC that you have an an estimate and this will avoid the possible charging of penalties and interest on undeclared income, if it later comes to light that it should have been taxed.
Watch out for the Child Benefit Charge
New legislation was introduced in January 2013 which means that, if either you or your partner earn taxable income of over £50,000 during a tax year and the household receives child benefit allowance, the benefit you received will need to be repaid (or part-repaid, if the person in question earned between £50,000 and £60,000) to HMRC as part of your self-assessment tax return. Please be aware, all of the above sources of income are included within the £50,000 limit – salary, dividends, rental income/profit and interest on savings. You are also able to make deduction such as pension contributions before arriving at the taxable income figure. HMRC’s online submission process will automatically calculate any amount due for you based on the other information you enter, or your accountant can advise.
If one member of the household earns £60,000 or more, the entire allowance will be repayable. In these cases, it probably makes sense to either de-register from child benefit, or to keep the money aside in an interest bearing account so that it is ready to be repaid when you submit your return. Allowance received in any year up until the 5th April will not be repayable until the following 31 January, so there is potentially a reasonable amount of time where it could earn you interest, the current low level of savings rates not withstanding.