Do I need to complete a tax return?
The majority of people in employment will not have to complete tax returns. Tax is deducted at source and paid by the employer direct to the Revenue. Similarly, the majority of retired people will not need to complete tax returns. The Revenue receive the information regarding State Pension and are able to adjust the tax paid on pension income through changing an individual’s tax code. There are however instances when tax returns need to be completed as summarised below:-
- If you are self-employed
- If you have more than £2,500 in untaxed income. This can include income from renting out property, commission or tips
- If you have income from savings or investments of more than £10,000 or receive dividend income of more than £10,000. For the tax year 2016/17 a lower rate tax payer can receive £1,000 of bank interest free of tax and £5,000 of dividend income. If you receive more than these amounts of income, the Revenue should be contacted who can then adjust your tax code
- If you make a chargeable gain. This might be from the sale of a second property or the sale of shares. If you sell your main property and you have lived it in through most of the period of ownership, no capital gains tax will become payable due to Principal Private Residence Relief. The Revenue do not need to be notified of the sale
- If you are a company director
- If your income (or your partner’s) was over £50,000 and one of you has claimed Child Benefit
- If you have income from abroad that tax needs to be paid on
- If your taxable income is more than £100,000
- If you have lived abroad and had UK income
- If you are a trustee of a trust or registered pension scheme
- If you are told by the Revenue to complete a return
It is an individual’s responsibility to advise the Revenue of circumstances that require a tax return to be completed. There are strict time frames as to when the return has to be submitted. A paper written return must be submitted before 31 October following the end of a tax year. On-line filing must be submitted before 31 January in the following year.
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