Tax Reminders

Reminders About Your Tax Return

September 29, 2023

When is a self-assessment tax return needed and why should I complete it early? The TAG Accountants Group tax advisors give you the low down!

Get Ahead of the Game

As tax accountants, we prefer to be ahead of the game and encourage our clients to get matters sorted well ahead of the statutory deadlines. Here are some timely reminders about when a tax return is needed and the benefits of getting it completed early.

Do you need to file a Self-Assessment Tax Return?

There are a number of reasons why you might need to complete a Self-Assessment return for the first time, e.g. you have become self-employed, have an annual income over £100,000, and/or you have income from sources where it is not taxed at source, such as savings, investment or property.

If you believe there is a need to complete a Self-Assessment return for the first time, then you should inform HMRC as soon as possible and no later than 5 October 2023 for the 2022/23 tax year.

If you are unsure, you can contact the team at TAG to get a view or, alternatively, you could use HMRC’s online tool that can help you check if you are required to submit one.

The main reasons leading to taxpayers being required to submit a Self-Assessment return are as follows:

  • newly self-employed (earnings need to be more than £1,000).
  • receiving multiple sources of income (especially if any are not taxed at source).
  • individuals with income over £100,000 (it is worth noting that from tax year 2023/24 this threshold for individuals taxed through PAYE only, will increase to £150,000 – see below).   
  • earning income from rental property.
  • becoming a partner in a business partnership.
  • taxpayers whose income (or their partner’s) exceeds £50,000 and one of you has claimed Child Benefit.
  • receiving interest on savings or investment income of £10,000 or more before tax.
  • have made profits from selling assets such as shares, rental property, or other chargeable assets that may lead to a Capital Gains Tax liability; and
  • you are a self-employed taxpayer, earning less than £1,000 but want to pay Class 2 NICs voluntarily to protect your State Pension entitlement.

As ever with these situations, if in doubt, take advice from the helpful team at TAG Accountants.

Change to Self-Assessment Threshold

The £100,000 threshold for Self-Assessment will be changing for taxpayers taxed through PAYE only to £150,000, from 6 April 2023 onwards.

It is expected that taxpayers who submit a Self-Assessment tax return for 2022/23 showing income between £100,000 and £150,000 taxed through PAYE and do not meet any of the other criteria for submitting a Self-Assessment return will be sent a letter by HMRC that will exit them from Self-Assessment and the need to submit a return for 23/24.

However, taxpayers will still need to submit a Self-Assessment tax return if their income taxed through PAYE is below £150,000 but they meet one of the other criteria mentioned above in receiving untaxed income.

Unincorporated Businesses with year-end out of synch with the tax year

Decent profit forecasts may be needed because of the changes to the taxation of sole traders and partnerships from 2024/25, and the complicated transitional rules that apply in 2023/24. The transitional rules may result in higher tax bills if your business does not have a 31 March or 5 April year-end as there is a change in basis period meaning unincorporated business profits are taxed in line with the tax year and there is a danger of some double taxation in the transitional year. If you have reliable profit forecasts for your business, we can help you to determine whether changing your business year end would be beneficial, and, if so, the most appropriate timing of that change.

If you continue to retain a year-end out of synch with the tax year, then the need for forecasts and/or management accounts to assist in calculating your taxable profits may be necessary.

We will be writing shortly to all our clients who may be affected by this and will be able to answer queries from any clients, or prospective clients around this difficult area.

Early filing of returns

The 2022/23 tax year ended on 5 April 2023 and the new 2023/24 tax year started on 6 April 2023. Plenty of taxpayers are content to leave their 2022/23 tax returns until later this year or even until January 2024.

Remember that 31 January 2024 is not just the final date for submission of the 2022/23 Self-Assessment tax return but also the date for payment of tax due in respect of that year and the date for the first payment on account for the 2023/24 tax year.

HMRC recommends early filing of tax returns, and we would agree with this recommendation. By preparing your tax return early, you will know what your tax bill will be well before the payment deadline of 31 January 2024. This also opens up the option of spreading the cost of your tax bill using HMRC’s Budget Payment Plan.

This strategy gives you time to set aside enough money to pay any tax payable and, should you be owed a repayment of tax then early filing can accelerate the repayment due.

Get great advice and guidance from your tax accountants!

Our team has a wealth of experience in dealing with Self-Assessment tax matters and filing huge numbers of returns. We love helping our clients, and with that in mind, please check out our testimonials page HERE.

If you need help in deciding whether Self-Assessment applies to you, in completing your tax return or require assistance with any other tax issues, all you need to do is contact us here at TAG Accountants Group, on 01902 783172 or alternatively, by using our online enquiry form HERE

We very much look forward to helping you.