Do you need to file a self assessment tax return for the first time this year?

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If you did not need to complete a 2015 tax return, but do need to complete one for 2016 (tax year ended 5 April 2016), now is the time to tell HMRC. 

Individuals are required to notify HMRC by 5 October 2016 if they are not already within Self-Assessment and receive income or gains on which tax is due. 

Reasons to need a tax return are given in full here and include any one of these:

  • Having total income more than £100,000
  • Receiving any trading or miscellaneous income
  • Receiving letting income
  • Being a company director
  • Receiving employment and/or pension income from multiple sources
  • Selling any capital asset (broadly except for your only home).
  • Receiving income from abroad
  • Earning more than £50,000 and you or your partner receiving child benefit

The maximum penalty for late notification (after 5 October following tax year in question) is the net amount of tax due, but unpaid, at 31 January following the tax year in which the liability arises. This means that even if notification is made after the six-month time limit, the penalty can be eliminated if the taxpayer pays the full amount of the tax due on or before 31st  January.

To discuss whether you need to complete a self assessment tax return please book a chat with us here.