HM Revenue and Customs (HMRC) have issued a press release debunking some common myths about whether or not someone needs to register to complete a self-assessment tax return. Here are some common myths and the realities.
Myth: I don’t need to file a return because HMRC hasn’t been in touch.
The reality is that it is each taxpayer’s responsibility to determine whether or not they need to complete a tax return. You may need to register and complete a tax return if you:
- have started to be self-employed and earned gross income of more than £1,000.
- earned below £1,000 but want to pay voluntary Class 2 National Insurance contributions to protect your pension and benefit entitlements.
- have become a new partner in a partnership.
- have received untaxed income above £2,500.
- need to pay the High Income Child Benefit Charge because you receive Child Benefit and you or your partner earned more than £50,000.
Myth: Tax has to be paid at the same time as the return is filed
The deadline for paying tax for the 2023-24 tax year is 31 January 2025. Tax can be paid any time before this date, it does not need to be paid at the same time the return is filed.
Myth: I don’t need to file a return because I don’t owe any tax
Tax returns need to be completed to claim tax refunds and to claim tax relief on business expenses, charitable donations, and pension contributions. A return also needs to be completed to be able to pay voluntary Class 2 National Insurance Contributions if you want to protect your pension and benefit entitlements.
Myth: HMRC won’t expect a return from me if I don’t need to file one
if HMRC have sent you a notice to file a tax return they will expect one and will charge a penalty if they don’t receive it. Taxpayers need to tell HMRC if they no longer need to file a tax return, perhaps because they’ve stopped being self-employed or stopped renting out a property. If you think you don’t need to complete a return it is best to tell HMRC as soon as your circumstances change.
Myth: I have to file a tax return and pay tax on things I sold after clearing out the attic
Although there has been speculation on this, the tax rules are that selling old clothes, books, CDs and other personal items through online marketplaces do not trigger a requirement to file a return or pay income tax on the sales.
Myth: The later I file my tax return before the deadline the less time HMRC will have to raise an enquiry.
HMRC always have 12 months from the date you file the return to open an enquiry. If your return is filed late, they have even longer. The enquiry window runs to the end of the quarter date after the first anniversary of the date on which the return was received.
Anyone who needs to complete a self-assessment return for the first time to cover the 2023-24 tax year needs to tell HMRC by 5 October 2024. If you are not sure whether you need to file a tax return for the 2023-24 tax year, please just get in touch with us. We’ll be happy to let you know what you need to do and to contact HMRC on your behalf.
