Select your question
Who needs to complete a Tax Return?
There are many reasons why you may need to complete a tax return, but the main reasons will be as follows;
- If you are self-employed in the UK
- If you have a UK property which you rent out
- If you have sold an asset in the UK
- If you are a director of a limited company
- If you earn over £100,000 per year
- If you live abroad for some or all of the year but have income arising from the UK
- If you receive any foreign income from abroad
What is the tax return deadline?
The deadline for completing a UK tax return is the 31st January each year. If you a liable to complete a tax return and do not do so by this date, HMRC imposes considerable fines for late filing and late payment of tax. Please do contact at your earliest convenience to ensure that this is done well ahead of the end of January.
The earliest that you can submit your tax return is the first day of the new tax year which is 6th April each year.
What documents will I need?
This will depend on what type of income that you receive, but we generally need details of all of your income and receipts/invoices for any expenses that you have incurred throughout the year. We can advise you on what specific expenses you can claim based on your personal circumstances and types of income.
What other fees may there be?
We always work on a fixed fee basis quoted in advance – we do not charge an hourly rate, and so you will always know what our invoice amount will be. There is no VAT to pay and therefore the price you are quoted is the full price, with no extra or unexpected costs.
We do not charge a retainer or have any on-going fees and so any information or help that you require throughout the year is included as part of our service; should you have any questions throughout the year someone will always be on hand to assist. Our fee is also an allowable tax-deductible expense in most cases and can be claimed against your rental income to help further reduce your profits declared to HMRC.
What is a personal allowance?
HMRC allows every UK resident to earn a certain amount of money each year, which is tax-free before any tax is due. For the 2021/21 tax year this was £12,500 per person, and in 2021/22 this has increased to £12,570.
In addition to this, if you have made any Capital Gains where you have sold an asset for a profit the first £12,300 of this is tax free in 2021/22 tax year.
If I own property in a joint name with someone else, do we both need to complete a tax return?
Yes, you will. If you own any property, sell any asset or work within a partnership with any other person then you will each need to complete a self-assessment tax return as HMRC needs to know about each individuals’ personal circumstances. For example, if you are a director of a limited company then each director will need to complete a UK tax return for their personal affairs.
When can I stop completing tax returns?
You can stop completing annual tax returns whenever you no longer meet self-assessment criteria. This is usually when your source of income ends, such as when you sell a property. Other areas of tax may only require a UK self-assessment tax return on a one-off basis such as Capital Gains tax, so please do contact us for more specific information tailored to your circumstances.
If I owe tax to HMRC when will I need to pay this?
All income tax due to HMRC needs to be paid in full by 31st January each year at the latest. For the 2021/22 tax year, your UK self assessment tax return must be submitted and all tax paid to HMRC no later than 31st January 2023 to ensure that you avoid penalty charges from HMRC.
If you owe any Capital Gains Tax to HMRC, then this must be calculated, reported, and paid to HMRC with 60 days of selling a UK based property.
Can I claim a tax refund if I have overpaid?
If you have paid tax in advance or collected at source from your income, then you will be able to claim a tax refund for any tax paid which is in excess of the tax owed. If your taxable income is below the personal allowances, you will be able to claim back all of your tax paid. There are timeframes in place for making a claim – up until 5th April 2022 you can only claim a tax refund for money paid as far back as April 2017.
If you have not paid tax in advance then it is highly unlikely that you would be due a tax rebate, but you will still need to complete a UK tax return every year if you meet the criteria.
Why use a tax agent?
Understanding the tax system in the UK can be daunting, especially if you are newly resident in the UK, or if you are a new property landlord. It may also be that this is your first time of selling an asset or working overseas. By using UK Tax Returns as your tax agent, we will make sure that you are aware of all expenses that you are legally entitled to claim which will help to reduce your tax liability.
As a registered HMRC tax agent we have excellent access to specialist advisors from HMRC, which we can speak to on your behalf. Our dedicated agent line to HMRC means that we can always come back to you quickly with specific enquiries about your tax position, tax account, or personal circumstances.
Our small team has over ten years of experience working within the UK tax industry, and we have seen many changes to the tax laws which vary with the changes in government power. From Labour to the coalition, and then back to the Conservatives - each budget announcement has made new provisions and sets out new rules and legislation for the tax system. As your tax agent, we keep fully up to date with the constant changes to ensure that you are best informed and compliant.
What happens if I make a loss in my rental or self-employed business?
If you meet self-assessment criteria then you must complete a tax return, regardless of if you have perhaps made a loss for the year. If you made a loss in your business, then this loss can be carried forward and used against any future profits to help reduce the amount of tax that you need to pay in a future tax year.
If you have incurred a lot of expenses in your business, then it is always worthwhile declaring all of the expenses to HMRC and maximising the loss amount as far as possible as this can save you income tax in the following tax year(s). The loss will then sit against your tax records for multiple years until it is entirely used up or off set against profits. Rental losses are kept separate to all other forms of income and cannot be used to offset or reduce any other form of income, such as your wages or capital gains.
When do I pay for your services?
In most cases you will be invoiced for our services after we have fully prepared your UK tax return, and this is sent over to you for your approval.
What major changes have been announced for landlords this year?
There has been a major shake up to the Buy to Let property sector in recent years with several changes already in force. The main change from April 2019 onwards is the sale of commercial property has become fully taxable to non-residents.
A much wider reaching change came into effect from April 2020 onwards which has seen the restriction of Principle Private Residence Relief (PPR), and the virtual scrapping of Lettings Relief. In all cases where a former home is retained as a second home or becomes a buy to let investment, these two reliefs hugely reduce the amount of Capital Gains tax that is payable to HMRC on the sale of the property. From April 2020 PPR has been significantly reduced, and the associated Lettings Relief has effectively been scrapped for the vast majority of taxpayers.