You Could Be at Risk of Tax Penalties. Learn How to Avoid Them!

More than 300,000 UK taxpayers could be less than two weeks away from facing tax penalties. This is why HMRC is calling on them to take urgent action on submitting their paper Self Assessment Tax Return. The deadline for filing by post is 31 October. Miss it and you could be staring down fines.

Although the majority of taxpayers can file online, some do not have such luxury. Those declaring foreign income and gains or managing trusts and estates must rely on old-fashioned paperwork.

Who Needs to File a Self Assessment Tax Return?

Self Assessment Tax Returns are required for certain individuals. This includes:

• Self-employed people having a gross income of over £1,000
• Partners in business partnerships
• Anyone with a total taxable income over £150,000

You must also submit a tax return if you have untaxed income, such as:

• Pension income over £2,500
• More than £1,000 from online trading or services
• Money earned from renting property, including Airbnb
• Landlords with rental income of £10,000 or more (or over £2,500 after expenses)
• Tips and commission
• Income from savings, investments and dividends
• Foreign income

Those subject to the High Income Child Benefit Charge and who have pocketed substantial interest from banks and investments are also on the hook for filing a tax return.

Five Tips for Completing a Tax Return

• Give Yourself Enough Time - Gathering all your paperwork can take time. You will need your P60, which shows the total tax taken from your income and records of benefits and expenses from your P11D or P9D forms. If you changed jobs in the last tax year, don’t forget your P45 from your previous employer.

• Claim Tax Relief on Pension Contributions - Keep track of any pension contributions you have made so you can claim the right amount of tax relief.
• Include Charity Gift Aid Payments - Make sure to record any gift aid payments, like sponsoring a friend for a charity event. HMRC offers tax relief on charitable donations.
• Keep a Copy of Your Tax Return - If you are employed or a pensioner, save all your paperwork for 22 months after the tax year ends. Self-employed individuals or landlords should keep their records for five years and ten months. Also, save proof of postage in case of any delays.
• Use Your Personal Savings Allowance - You can earn up to £5,000 in interest on your savings tax-free each year.

Conclusion

With the 31 October deadline for Self Assessment Tax Return fast approaching, gather the right documents and submit your return on time if you have not yet. Whether you are filing by post or online, following HMRC's instructions can help you avoid mistakes and fines.