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To find out if you need to complete a tax return read our checklist below, If you meet one of the conditions, it’s likely you’ll need to!
Over the recent years, changing legislation and increasing tax scrutiny has made completing annual self-assessment tax returns (SATRs) more stressful and time consuming.
UK residents are required to report UK income and gains to HMRC each year unless they are non-UK domiciled and make a claim for the remittance basis. Non-UK residents are only required to report UK sources of income and gains.
Income includes employment, self-employment, rents, interest, dividends etc. Gains can arise on the disposal of assets (such as shares, antiques, and property) and even where the sale results in a loss you may still have reporting requirements. In addition, if you are a company director, or you or your spouse receive child benefit, you have a requirement to submit a self-assessment tax return by 31 January each year.
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To find out if you need to complete a self-assessment tax return read our checklist below, If you meet one of the conditions, it’s likely you’ll need to
Edge Tax have a team of professionals who can take away the stress and make the whole process run smoothly.
If your SATR is selected for an enquiry we can act on your behalf liaising with HMRC. Find out more about our investigation service
If you would like to speak to one of dedicated advisors about how we can help take the stress out of your SATR, please contact us.
It varies, as you might have anticipated. There’s a commonly held belief that allocating 30% of your monthly earnings is a good practice to cover your tax obligations, and in many situations, this rule of thumb proves useful.
However, the situation can be more intricate, so let’s examine a few diverse scenarios. Keep in mind that if you’re a freelancer or a sole trader, your taxes are calculated based on your profits, not your total income.
For instance, envision you work as a freelance copywriter. You bill a client £100 for a project, and after deducting all expenses, you have £100 in pure profit. This is the amount you’ll be taxed on, so it’s advisable to set aside 30% of that £100.
On the other hand, if you’re a plumber and your charge for a job is £100, but you incur £50 in expenses, leaving you with £50 in profit, then you should consider setting aside approximately 30% of the £50, which amounts to £15, to meet your tax obligations. Setting aside a full 30% might potentially lead to cash flow challenges in this scenario.
If you fall into the category of being a “high earner,” earning in excess of £100,000 annually, the HMRC will closely scrutinise your financial situation. Your circumstances are likely more intricate than most, possibly involving multiple income sources. Ensuring accurate accounting of all these aspects necessitates the submission of an annual Self Assessment tax return.
Another rationale behind the tax authority’s request for a tax return from high-earning individuals is its impact on your tax-free Personal Allowance. This determination hinges on what the HMRC terms your “adjusted net income.” This calculation doesn’t consider your Personal Allowance but does encompass certain types of tax relief. In essence, for every £2 over £100,000 that your adjusted net income surpasses, you lose £1 of your tax-free Personal Allowance. This can become intricate swiftly, which underscores the necessity for the HMRC to employ a tax return to untangle these complexities.
HMRC employs various methods to uncover undisclosed income. To begin with, they utilise advanced software known as Connect. This system is specifically engineered to scrutinise extensive datasets and detect any irregularities that might indicate tax evasion. Subsequently, based on these findings, HMRC may initiate an inquiry.
You must register for Self Assessment by 5 October if you have to send a tax return and you have not sent one before. You can register here
Simply fill in the form below and a member of our expert team will be in touch to discuss your Self-Assessment Tax Return needs and how Edge Tax can help.
