28th September 2023One week left to register for self-assessment tax return

The deadline for individuals to register themselves for Self-Assessment is October 5th. With only a week to go, Trusha Shah, Tax Manager at HW Fisher outlines who needs to register for the self-assessment and how to start preparing your tax return.

“Registering for the self-assessment is an important first step. If you do not let HMRC know by the 5th October that you need to complete a tax return, you could face a fine. Fortunately, one week is plenty of time for individuals to sign up via HMRC’s website.”

What is a self-assessment and who needs to complete it?

You must submit a self-assessment tax return if you are a UK resident and have self-employed earnings or have received untaxed income over £1,000. However, it’s not just the self-employed who have to complete a tax returns. You will also have to file if you have any untaxed income from:

• money from renting out a property, including through Airbnb
• savings, investments and dividends
• foreign income

What about non-UK resident landlords?

Non-resident individuals who rent a property and receive income from it in the United Kingdom must also register with HM Revenue & Customs. However, they cannot register with HMRC to file online. Instead they need to hire an agent with the right software to assist.

It is important to remember that non-resident individuals can opt to have their rent paid gross without the deduction of tax at source by letting agents, which would allow them to pay the tax themselves via self-assessment tax returns. For many this has proven more favourable as it allows you to account for any rental expenses that have been paid personally and not through the letting agent. Any tax withheld by the letting agent can be claimed as a deduction against the landlord’s UK tax liability.

When does your tax return need to be completed?

The deadline depends on whether you are planning to submit your tax return online or via post. The deadline for paper returns is the 31st October 2023. If you decide to complete your tax return online, the deadline is 31 January 2024. HMRC has revealed that last year 96% of returns were completed online.

Four ways to start preparing

1. Set yourself reminders – Especially if you are planning to complete your tax return by post, you have less than a month until this is due. Set yourself reminders to avoid starting your return too late. You are more likely to make a mistake if you rush it, and if you miss it, you will be forced to submit your tax return online to avoid penalties.
2. Start gathering your paperwork – It always takes longer than you think! Forms that you will need include your P60 which will confirm the total tax you have paid on your income. You will also need a record of benefits and expenses which can be found on your P11D or P9D forms. If you have left a job in the last tax year, you will also need a P45 from your previous employer.
3. Find out which of your assets have tax implications – Assets such as property, company shares that are not in an Individual Savings Account (ISA) or Personal Equity Plan (PEP), and even crypto assets, require you to report a sale/disposal – this is often forgotten!
4. Look into what tax reliefs are available – For example, HMRC provides some tax reliefs on charitable giving and so it is important to keep a record of any gift aid payments that you have made. You should also make a note of your pension contributions as tax relief is available on these too.

Shah adds: “Remember – If you’re moving back to the UK, or if you are going to spend time abroad, you need to inform HMRC of any change of permanent or residential address and/or residency status.”

To discuss specific circumstances, please get in touch with Jamie Morrison, Tax Partner at HW Fisher.