A Guide to Tax Returns

If you are self employed or working as part of CIS or qualify for self-assessment then you will need to file a tax return. This is necessary, especially if you are not already paying tax, to let the tax office know what you owe. It may also be a way of indicating that you qualify for a refund.

What is a tax return?

Even if you are a PAYE, or pay as you earn, taxpayer, you may still have to file a tax return to declare any other forms of income or to make a claim for a rebate. With a self-assessment tax return, you are telling HMRC what you earn, the expenses you incur to stay in business and what you owe, or may be owed. As a PAYE taxpayer, money is deducted from your salary automatically as you earn it. With self-assessment, you are reporting other forms of income.

What information do I need for a tax return?

You will need to keep accurate records of money coming in and going out. To file your return, you will also need the appropriate ID to get a UTR which is necessary to file self-assessment returns. If you were working for an employer but stopped, you may need your Form P45. You may also need the P60 form, showing what tax may have already paid. You may also require the P11D form to report any other “benefits” such as a company car or subsidised activities. You might need any records you have of Taxed Award Schemes, plus redundancy payments if you were made redundant by an employer during the tax year. You should also keep records of other forms of income, such as bonuses, tips, incentive payments or vouchers.

What is a UTR number and how do I apply for one?

A UTR is a Unique Tax Reference. You will receive one of these when you apply to file a self-assessed tax return. To get a UTR, you will need forms of ID, personal details such as your full name and date of birth, and information such as your National Insurance number. You will also need an address to which HMRC can post your UTR. This is a necessary part of the UTR activation process. It may take at least two weeks to get your UTR, the activation code and to activate it online, so don’t leave it until the last minute to apply for one. Once you have your UTR, it will appear on all official correspondence with HMRC.

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When is the tax return deadline?

The deadline is the end of October if you are filing a return on paper. If you are filing your return online, then you have until January 31st of the new year, which is another three months, to do so. Apart from having more time, another benefit of doing your return online is instant acknowledgement.

What is the difference between a tax refund and a tax return?

A tax return is your report of your income, and a tax refund is where HMRC returns some of the tax you have already paid because you have paid more than necessary, or expenses incurred mean you are entitled to a rebate.

Do I have to do a tax return with CIS?

If you are in the construction industry and part of CIS, you will need to file a tax return. If you have paid more tax than necessary, filing a self-assessment return is vital for making any claims. The tax office will expect a return if you are part of CIS.

How do I submit a CIS tax return?

If you are part of CIS, then you need to sign in online and send your monthly submissions. If you pay too much in CIS deductions then HMRC will reimburse you. To complete your CIS self-assessment, you will need your UTR and records of all your earnings and expenses throughout the year and submit this information in a self-assessment return at the end of the tax year.

Self-assessment tax returns are designed to be easy, but depending on your situation, they can become complex. You don’t want to make mistakes as this can result in costly fines and penalties. If you need help with your self-assessment or CIS return, don’t hesitate to get in contact with our friendly experts today.