We understand that taxes and creative individuals do not often mix well but the deadline for filing and submitting your tax return for the last tax year (6th April 2014 to 5th April 2015) is now less than three months away so the time to procrastinate is over!
To help you in the run up to the 14/15 submission deadline we’ll be posting regular Tax Return Tuesday blogs.
Kicking off this new series we start today with a five minute guide to tax returns….
What is a self-assessment tax return?
A self-assessment tax return, also known as the SA100, is the main form issued by HMRC to collect information on income in order to check tax liability for the past tax year. The forms are predominantly used by individuals who are self-employed but also cover a range of income streams (see below).
Who needs to complete a self-assessment tax return?
Most tax payers are taxed at ‘source’ from their employers through the Pay As You Earn (PAYE) scheme and therefore do not need to complete a tax return however, if you are one of the over 11 million people that fall into one of the following categories it’s likely you'll need to complete a self-assessment form this year:
- You're self-employed
- You're a partner in a business partnership
- You're a company director
- Your annual income is £100,000 or more
- You have made a profit from selling a second home, share or other chargeable assets e.g personal possessions worth £6,000 or more (excluding your car) and have Capital Gains Tax to pay
- You have income from savings or investments that is £10,000 or more that hasn’t been taxed
- You have income that is £2,500 or more (e.g. from renting out a property) that hasn’t been taxed
- You need to claim expenses or tax reliefs
- You or your partner receive child benefit and your income is over £50,000
- You receive income from overseas that you need to pay tax on
- You have income from trusts, settlements or an estate
- You've lived or worked abroad or don't live in the UK permanently
- You're a trustee of a trust or registered pension scheme
Note: Unless you are registered as self-employed you will not normally receive a notification from HMRC that you need to complete a self-assessment tax return therefore it is important that if you fall into one of the above categories and you think you may need to complete a tax return that you take action. Refer to the HMRC website or contact us to find out if you are eligible.
When do I need to file my return?
The deadline to file your self-assessment tax return online for the 2014-2015 tax year is 31st January 2016. However this is also the deadline to pay any tax owed and so it is advisable you submit your return early so HMRC can inform you in good time if you have any monies due. Over 40% leave it until January to complete their tax return, by this time HMRC are dealing with over 80,000 returns a day so don’t delay, file your taxes today!
What do I need to do first?
In order to file and submit a tax return you must be registered with HMRC. For the 14/15 tax year this should have been done by 5th October 2015, however, if you missed this date don’t worry. You won’t get a penalty as long as you file your return and pay any tax due by the deadline but it is important you contact HMRC ASAP.
In order to submit your return online you will also need to be signed up for HMRC online services. For this you require an activation code which HMRC will send you by post. It can take up to 10 days to receive this so again it is important you don't delay.
If you already have a self-assessment online account but have lost your user ID and password. You can request replacement credentials online
I don’t think I have anything to pay, or I’ve already paid enough tax do I still have to complete a tax return?
Even if you don’t owe any tax or feel you have already overpaid, if you have received a notification to file from HMRC you must complete and submit a return by the 31 January deadline. This applies even if you are an employee and all your income is taxed through PAYE.
If it turns out you have overpaid then you will receive a tax rebate from HMRC once they have processed your return.
What happens if I miss the deadline?
If you miss the 31 January deadline you will face an immediate £100 penalty (whether you have tax to pay or not) and additional daily penalties of £10 the longer you delay.
How Bambridge Accountants can help
At Bambridge Accountants we understand that as creative individuals your finances are often the last thing you want to think about. We leave the creative work to you so why don’t you leave your taxes to us?
We charge fixed fees for the preparation and submission of personal tax returns and offer a 25% discount on our fees to clients who are members of Spotlight, Casting Call Pro, Director’s UK, Equity, SMA, The Actor's Centre and To Be Seen.
If you are unsure whether you need to complete a tax return, or to make a start on your 14/15 return contact us today to find out how we can help you.