Filing tax returns can be a daunting task for many individuals, but it is an essential responsibility that must be fulfilled. In the United Kingdom, HM Revenue and Customs (HMRC) is the authority responsible for collecting taxes, and it is mandatory for individuals who earn above a certain threshold to file their tax returns each year.
In this article, We will guide you through the process of filing tax return to HMRC, including who needs to file, what documents are required, how to file, and what to do if you make a mistake.
Who Needs to File a Tax Return?
You must submit a tax return if you live in the UK and make more money than the personal exemption during the tax year. You can earn up to your personal allowance before you must begin paying income tax. For the tax year 2022–2023, the personal allowance is currently set at £12,570.
You might also be required to submit a tax return if someone has:
- income from savings, investments, or property.
- income from another country.
- capital gains tax to pay.
- income from a trust or settlement.
- income from employment but have not paid enough tax through PAYE.
- Income from self-employment
- directorship of the company
If you are unsure whether you need to file a tax return, you can use HMRC’s tool to check.
What Documents Do You Need to File a Tax Return?
Before you start filing your tax return, you need to gather all the necessary documents and information. Some of the documents you may need include:
- Your P60 or P45 form, which shows how much you have earned and how much tax you have paid in the tax year
- Your bank statements
- Details of any income from savings, investments, or property
- Details of any expenses you can claim tax relief on, such as work-related expenses or charitable donations
- Details of any pension contributions or student loan repayments
- Your National Insurance number
How to File Your Tax Return?
There are several ways to file your tax return to HMRC. The most common methods are:
1. Online Using the HMRC Website or Software
To file your tax return, registration with HMRC’s service is required for file self-assessment return. Once registered, you can use the online form to enter your income, expenses, and other details. The online form will guide you through the process, and you can save your progress and come back to it later if needed.
Alternatively, you can use third-party software to file your tax return. The software is usually more user-friendly and can help you identify any errors or missing information.
2. By Post
If you prefer to file your tax return by post, you can download the form from the HMRC website and send it to HMRC by post. However, you need to make sure you send it before the deadline, which is 31-Oct for a paper return or 31-Jan for an online return.
3. Hiring an Accountant
Consider hiring an accountant if you’re self-employed or dealing with a complex tax situation to aid in filing your tax return. An accountant ensures thorough accounting of all your income and expenses while assisting in identifying eligible tax reliefs or deductions.
What to Do If You Make a Mistake?
If you make a mistake on your tax return, you need to correct it as soon as possible. The easiest way to correct a mistake is to file an amended tax return. You can do this online or by post.
If you filed your tax return online, you can make changes by logging into your HMRC account and selecting the option to amend your return. If you filed your tax return by post, you can download the amended form from the HMRC website and send it by post.
You need to make sure you correct any mistakes before the deadline, which is usually 12 months after the filing deadline for the tax year. If you miss the deadline, you may be charged a penalty.
Filing your tax return to HMRC can be a straightforward process if you are well-prepared and know what to expect. Make sure you gather all the necessary documents and information and choose the filing method that works best for you. If you have any questions or concerns, don’t hesitate to contact HMRC or seek professional advice from an accountant or tax specialist. By filing your tax return on time and accurately, you can avoid penalties and ensure that you are paying the correct amount of tax.