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Tax Return

Personal Tax Returns

 

In the United Kingdom, a personal tax return is defined as a legal document filed with the HM Revenue and Customs, which declares that one is liable to be taxed as per local laws. The tax to be filed depends on the corresponding body. As of today, the three most common types of tax return are:

• SA100 - this is for those individuals who pay Income Tax
• CT600 - this is used by a company in order to pay its Corporation Tax
• P35 - this is used for PayAsYouEarn deductions by employers

However, we shall be discussing personal tax returns here.UK Personal Tax returns are to be deposited by someone with a source of income or revenue other than the main source of employment. Tax payers with more return value have to complete a special form called a Personal returns form. People with capital gain like from sales of property, stock market shares or the sale of a business have to file tax returns and submit them to the HMRC for proper taxation.

Submitting UK tax returns or self assessment tax returns seems to be a very daunting task at first when one receives the forms. Though the HMRC does provide help and pointers on how to file the returns pretty quickly and as painlessly as possible, but it's always a good idea to take help from others as there are a lot of grey areas one may struggle with. But in the end, making sure that the figures are accurate is your sole responsibility.

PAYE or Tax Returns?

On a side note, people without a source of income are not taxed by the PAYE. You need to file returns if:

• You're self-employed
• If you are self-employed (like membership or partnership) it is important that you file your tax return.
• If you are director of a company / Entrepreneur (unless you are the director of any non-profit organisation, like a charity, and do not receive any benefits or payments)
• A religious Minister
• You have an Income that is above a certain amount from investments, savings, the stock market or properties.

If you do not already file your tax return, you will have to it in the event of any of the following:

• Income of £10,000 or greater from savings and investments.
• Income from investments or untaxed savings amounting to £2,500 or greater.
• Income from any owned properties (before you deduct any allowable expenses) amounting to £10,000 or greater
• Income on which you still need to pay taxes from a deceased person's estate
• Any overseas income
• In case you have an overseas income that is liable to be taxed in the UK
• You have an annual income amounting to £100,000 or greater

 

You have to declare certain reliefs or expenses if you are in employment and wish to claim for professional subscriptions or expenses amounting to £2,500 or higher, you must complete personal tax returns. Some rare reliefs, like the relief on Enterprise Investment Scheme relief, can be claimed only when you complete a tax return. You need to declare relief in case you owe tax but HMRC is unable to collect the tax through your tax code, or you rather pay direct. If you pay tax through PAYE and owe taxes at the end of the financial year, you will require a tax return if any of the following is applicable:

• HMRC is not able to collect the taxes due by changing your Tax code
• You don't have to pay through the tax code if you want to. Direct payment is an option.
• If you have "Capital Gains Tax" to pay, for instance you've disposed of an asset you will have to fill in the Capital Gains Tax forms.
• You have worked or lived overseas or do not have domicile in the UK

You may need to file a personal tax return if you're:

• Not a resident
• Not residing in the UK and claim the 'remittance basis'
• Dual resident of another country and the UK

In addition to these main categories, there are also a lot more categories such as pensioners, and such, but for the sake of clarity, we choose not to include them here.

Which type of tax return?

The type of self assessment form you will need to complete depends on your employment status and your designation, for example if you're a director, your rates will vary from a normal employee. The more you earn, the more you pay.

If you're self employed or in a partnership, you will have to file yourself as a self employed. The HMRC site should have details for self-employed tax returns. If your circumstances may have changed like you have done work or a variety of other activities which mean you need to pay extra tax - you need to contact your local tax office and ask for a return form.

To sum up, we may say that filing Tax returns isn't an easy task where the UK is concerned. There are a lot of agencies which offer to file your returns on your behalf in return for a small fee. Finding which one suits you the best is not easy, but it'll save you a lot of work when the time comes for you to return your taxes. Also, searching the Internet goes a long way into helping you in your journey to file you tax returns with the minimum possible amount of problems.

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