So you know you need to fill in a tax return and you’ve registered with HMRC, what’s next? Unfortunately its paperwork time!
Get your paperwork together
In order to fill out your tax return you will need details of everything you have earned over the last tax year. For the 14/15 year this is everything between 6 April 2014 and 5 April 2015.
Everyone is slightly different in terms of their sources of income but in general this will include income from employment, self-employment, from property, and other sources of income such as interest received on savings, or any investment returns.
If you are employed you will need copies of any/all of the following in order to work out your total employed income for the last tax year:
Your P60 is a form which shows how much tax you have paid on your salary in the last tax year. If you are employed your employer should have given this to you by 31 May 2015. If you haven’t received your P60 for the 14-15 tax year request it from your employer.
You will receive a P45 form from an employer if and when you stop working from them. The P45 will show how much tax you paid to date in the tax year whilst an employee for the company.
You should receive a P11D form from your employer if you receive any company benefits such as a company car, private medical insurance or interest free loan. It isn’t a legal requirement for employers to provide this form for you and so if you do receive company benefits ask your employer for a note of the details.
You should receive monthly payslips from your employer which detail your gross pay (your total salary before tax), all tax and deductions, and your net pay (your take home pay after deductions).
In order to work out your total self-employed income you’ll need copies of the following for any self-employed work you carried out between 6 April 2014 and 5 April 2015.
- Agent statements
- Remittance statements
Other sources of income
You will also be asked to declare any additional income you received from any of the following sources:
Interest on bank accounts
This includes any interest received on bank accounts apart from ISAs (Independent Savings Accounts) which are tax-free. The 14/15 ISA allowance is £15,000.
This includes any income you receive from renting out property you own, or room(s) within your home. You must normally pay tax on any profit you make from renting out property you own. The profit made is the amount remaining once you’ve added together your rental income and deducted any allowable expenses*
* Check out our blog next week for a ‘how to’ guide to tax on property and rental income.
Dividends and shares
If you own shares in a company, you may receive a dividend payment. Only higher or additional rate tax payers pay tax on dividends but you still need to declare them on your tax return.
If you sell or dispose* of an asset e.g. a painting or property that isn’t your main home then you need to declare any profit (gain) made on your tax return as this may be liable to tax.
*Disposing of an asset includes selling it, giving it away as a gift, swapping it or getting compensation for it (e.g. an insurance payment).
There are certain types of benefits you need to declare. This includes maternity/paternity pay, Job Seekers Allowance, and statutory sick pay.
This includes income received from any state and private pensions.
If you are a UK resident and receive foreign income* e.g. wages if you work abroad, foreign investments and savings interest, rental property on overseas property or any income from pensions held overseas then you will need to declare this on your tax return.
* Foreign income is anything from outside England, Scotland, Wales and Northern Ireland. Any income received from the Channel Islands and the Isle of Man are classed is classed as foreign income.
Give yourself plenty of time...
We appreciate that gathering all the information listed above can be a big job and that most people won’t have the information neatly stored away ready for their tax return.
You still have some time before the 31st January deadline but we advise you to start gathering the information as soon as possible, particularly if you have details missing which you need to source/request.
In addition to your income you'll also need to have a record of all your deductible expenses between 6th April 2014 and 5th April 2015 in order to make sure you aren't paying tax unnecessarily. This includes any personal pension, charitable or student loan contributions you have made.
We know making sense of expenses and what you can and cannot claim can be especially tricky for creative individuals who are self-employed and so next week our Tax Return Tuesday Blog will be dedicated to everything expenses!
What help can I get?
There are many resources available online to help guide you through the process of filing your tax return properly. The HMRC website is a good place to start but Bambridge Accountants are also on hand to help so if you have a question please get in touch to arrange a free consultation.