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Do I need to complete a Tax Return?

Date posted: 14th May 2018

In basic terms, you need to complete a Tax Return if you have a tax liability that cannot be collected by HMRC via a direct deduction of tax at source. So most individuals with salary or wages as their only source of income don’t complete Tax Returns as the correct tax should have been deducted from their income by their employer.

Those with untaxed sources of income may need to complete a Tax Return to report the tax due to HMRC. Examples of untaxed income are:

  • Income from self employment
  • Share of partnership profits
  • Rental income
  • Bank interest
  • Dividend in excess of £2,000

In addition, if you receive child benefit and have income between £50,000 and £60,000 you are likely to meet the requirements to complete a Tax Return.

If you have sold a capital asset (eg a property or share portfolio) then you may need to complete a Tax Return to report any capital gains tax payable.

You may also be required to complete a Tax Return if you have income over £150,000 and your or your employer make significant pension contributions.

There may be other reasons you need to complete a Tax Return so you should check with us.

What about company directors?

Despite what HMRC guidance may state there is no legal requirement for a company director to complete a Tax Return. We have successfully argued against this in the past with HMRC and managed to cancel late filing penalties in respect of Tax Returns for directors, where they have no tax liability other than the tax taken from their salary.

However, most company directors are likely to receive dividend income and therefore have a requirement to complete a Tax Return to declare the tax due on the dividend income.

If you have received a Tax Return from HMRC and are unsure why you need to complete one then give us a call as we will be able to advise and assist in completing the Return for you.

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