What is a tax return? - Featured Image

What is a tax return?

A tax return is one of the most important documents you need when in any kind of employment.

It’s a document issued by HMRC every tax year, from 6 April to 5 April the following year, and provides you with a detailed rundown of your finances, including income and costs.

All personal tax return forms require you to enter information such as:

  • Types of income, like bank interest or the dividends received
  • Tax reliefs such as donations and charities
  • Other types of income, including self-employment or salary from a job

Do I need to submit a tax return?

If you’re working for a company who uses the PAYE system, then submitting a tax return is already handled for you so you don’t have to do anything.

However, if you’re self-employed or a company director for your limited company, you must fill the tax return form yourself. Or, you can hire an accountant to do this for you.

Submitting your tax return

Once you have filled in all the relevant information, you must send it to HMRC. There are two deadlines for this:

  • All paper tax returns must be returned by 31st October after the end of the tax year
  • All online form must be returned by 31st January after the end of the tax year.

Late fees

Failure to send the tax return to HMRC on time will unfortunately result in a penalty charge, which increases the longer you leave it (uh-oh)!

You could be fined:

  • 1 day after the deadline – £100
  • 3 months - £10 extra per day which is capped at 90 days, maximum of £1,000
  • 6 months - £300 on top of the above charges
  • 12 months – Extra £300 on top of the already accrued charges, with 100% of the tax in serious cases

For more information, don’t hesitate to contact us.

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