HMRC self-assessment
  • October 6, 2022
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HMRC self-assessment

HMRC Self-Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income (including grants and support for COVID-19) must report this on their tax returns.

In the United Kingdom, a tax return is a document that must be filed with HM Revenue & Customs declaring a tax liability. Different authorities have to file different returns with respect to different forms of taxation.

Income tax HMRC self-assessment

Most employees paying tax under the PAYE scheme do not have to file a tax return, as the PAYE scheme works by deducting the correct amount of tax from their wages or salaries. However, some taxpayers, including employees, may have income that has not been taxed at source and needs to be reported to HMRC, usually by submitting a tax return.

In legal terms, a taxpayer is required to file a tax return when requested by HMRC by sending a notice to file a tax return, either because the taxpayer has registered for self-assessment voluntarily or because HMRC considers that it is required – HMRC can request a tax return from anyone for any reason.

Under UK tax law, taxpayers are required to notify HMRC when they become liable for tax no later than 9 months after the end of the tax year in which they became a taxpayer. Depending on the circumstances and the tax owed, they can do so by signing up for self-taxation and completing a tax return by January 31.

Although there is no legal obligation to register for income tax purposes when there is no tax liability, HMRC guidance states that a tax return is required for the following reasons, some of which are not statutory:

  • self-employed including someone in a partnership.
  • a minister of any religion
  • anyone living or working abroad or is not domiciled in the UK
  • having Capital Gains Tax to pay
  • anyone who owes tax and it can not be collected through the tax code. For instance when the taxable Basic State Pension, combined with other untaxed income, is greater than the Personal Allowance.

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