His Majesty’s Revenue and Customs (HMRC) has warned of a common misconception about filing tax returns that could land you a hefty fine. In a post to X this morning, the non-ministerial Government department highlighted the importance of filing returns by October 5, providing you meet the relevant criteria.
“Myth: HMRC hasn’t been in touch, so I don’t need to file a tax return,” the message read, adding: “Reality: You might need to do a tax return if you: Have earned more than £1,000 through a side-hustle. Are newly self-employed. Rent out a property. Use cryptoassets.”
Typically, tax is deducted from company wages and pensions using an automatic system known as PAYE. However, if you receive money from outside sources, you’ll need to submit a tax return to HMRC every year.
Which? explains: “If you receive any other income – such as from self-employment, property, capital gains, or dividends – you need to report this to HMRC by sending a self-assessment tax return.”
Last year, the consumer champion estimates that over 12.1million people were expected to file a ‘Self Assessment’ tax form. Anyone can do this by filling out a form online or sending a paper copy – but for the latter, you’ll need to request ‘form SA100′ by calling HMRC.
Aside from the four reasons outlined in HMRC‘s X post, its site also draws attention to various other circumstances you might need to fill in a tax return. These are outlined below:
- You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- You were a partner in a business partnership
- You had a total taxable income of more than £150,000
- You had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
- You had to pay the High Income Child Benefit Charge
- You receive money from renting out a property
- You receive tips and commissions
- You receive income from savings, investments and dividends
- You receive foreign income
To see if this applies to you, the public is advised to use HMRC‘s simple online checker tool, which is available in both English and Welsh. Although the tool requires some financial details to work, it won’t send your information to HMRC.
If you miss the deadline or fail to send a tax return at all within three months of October 5, you may face a penalty of £100. Beyond this, the fine will only increase and interest will be added.
