If you have relatively straightforward tax affairs and already pay tax through PAYE (Pay As You Earn) you probably won’t need to complete a tax return. But if you have more complicated tax affairs – or income from several sources – you may need to complete one and failure to do so may result in penalties and surcharges being charged.
The most common reasons for needing to fill in a tax return are listed below.
If HM Revenue & Customs (HMRC) asks you to complete a tax return for any other reason (this will normally to be to make sure that you’re paying the right tax and getting the right allowances) you must always do so.
If you’re self-employed (including being a member of a partnership) you always have to complete a return.
Company directors, ministers, Lloyd’s names or members
You must complete a return if you’re any of the following:
- a company director (unless you’re a director of a non-profit organisation, for example a charity, and don’t receive any payments or benefits)
- a minister of religion (any faith)
- a name or member of Lloyd’s
Income above a certain level from savings, investment or property
If you don’t already complete a tax return, you’ll need to do so if you receive any of the following:
- £10,000 or more income from savings and investments
- £2,500 or more income from untaxed savings and investments
- £10,000 or more income from property (before deducting allowable expenses)
- £2,500 or more income from property (after deducting allowable expenses)
- annual trust or settlement income on which tax is still due (even if you’re only treated as receiving this income)
- income from the estate of a deceased person on which tax is still due
You’re 65 and receive a reduced age-related allowance
If you receive a reduced age-related allowance because you’re 65 but your income is over a certain level (£24,000 for the 2011-12 tax year), you’ll need to complete a tax return. But there are exceptions, for example if your tax affairs are very straightforward.