HMRC has produced an updated list of who needs to complete a tax return.

We have found there is a lot of confusion about when you need to complete a tax return to HMRC and when you don’t. Getting this part wrong can be expensive, with late filing fines of up to £1,200 being issued.

HMRC introduced a trading allowance of £1,000 in April 2017 that was designed for individuals who had a hobby that was earning a small amount of income, under £1,000 in sales. If this criteria was met, there was no need to submit a personal tax return to HMRC.

To clarify, this criteria is geared around your sales not your profit (how much you have left after your business expenses are taken away from your sales).

If you made a £200 loss but your sales for self employment were £1,500, you are required to submit a tax return to HMRC. Self Employment losses can be utilised against employment tax or carried forward or even backwards so they are not lost and can even result in a refund of funds in a loss situation.

Not declaring child benefit once your total taxable income exceeds £50,000 is another common error we see with clients. If your bonus from work meant your taxable salary before any net pension adjustments, was more then £50,000 then you need to register for a tax return and pay back a portion or all of your child benefit received even if your partners income was less then £50,000 that year.

One that is not on this list relates to Estate income. If someone has died and has earned income from dividends, bank interest, property, disposal of capital assets etc, that income is taxable and must be paid by the Estate before the proceeds to the Estate are distributed to the beneficiaries.

Another is where your gross income via your PAYE job is over £100,000. You must also register and complete a personal tax return each year to HMRC.

As always, if you are not sure, a quick call to HMRC or to a friendly accountant will help you clarify whether you need to complete a tax return for the relevant tax year. At KFH Accounting, we can register you for the correct self assessment return and calculate and complete your tax return for you, so you know your tax is correct for submitting to HMRC.

Our prices start at £250 + VAT so please feel free to reach out to us on 01268 786 960