There are many reasons why you may need to complete a tax return but the main reasons will be as follows;
WHO NEEDS TO COMPLETE A UK TAX RETURN?
If you have paid tax in advance through CIS and your taxable income (your income minus your expenses) is less than £11,850 for the 2018/19 tax year then you will be due all of your tax back as a tax rebate. If you have earned more that £11,850 profit then you are still highly likely to be due a tax refund and we will be able to tell you exactly how much money you will be due once we have looked at some of your basic figures.
If you have not paid tax in advance because you are standard self-employed or receive rental income then it would be unlikely that you would be due a tax rebate, but you will still need to complete a UK tax return every year.
Will I be due a tax refund?
The deadline for completing a tax return is the 31st January following the end of each year. If you are liable to complete a tax return and don't do so by this date then HMRC have large fines that they impose so please 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 one the first day of the new tax year which is 6th April.
What is the tax return deadline?
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.
What happens if I make a loss in my rental or self-employed business?
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 everyone’s individual personal circumstances. For instance if you are a director of a limited company then each director will need to complete a UK tax return for their own personal affairs.
If I own property in a joint name with someone do we both need to complete a tax return?
CIS stands for the Construction Industry Scheme and all tradesmen who subcontract on a construction site of any kind will most likely be registered under this scheme. This scheme is a government initiative which means that tax is collected from you monthly in advance through your wages from your main contractor. Unlike most self-employed people you will be paying tax as you go under the CIS scheme. It is the law that every CIS worker completes a UK tax return every year to declare your income and claim your expenses even if you are paying tax monthly at source.
What is CIS?
This will depend on what type of income that you receive, but generally we will 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
What documents will I need?
There is no VAT to pay and so the price you are quoted is the full price with no added unexpected costs. In some circumstances it may be that you have some income documents missing and so, if you expressly request this of us we can request the information of your behalf from employers or letting agents etc. If you would like us to do this then we will charge £30 per company that we obtain information from but this will always be discussed in advance.
What other fees may there be?
Understanding the tax system in the UK can be daunting, especially if you are newly self-employed or 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, or increase your tax rebate where applicable.
As a registered HMRC tax agent we have great access to specialist knowledge from the HMRC advisors through our dedicated agent line which means that we can always come back to you quickly with specific enquiries about your tax position or personal circumstances.
Our small team has 8 years of experience working within the UK tax industry and we have seen many changes to the rules and regulations along the way through the many changes in government power. From Labour, to the coalition and then the Conservatives this summer 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.
Why use a tax agent?
When can I stop completing tax returns?
You can stop completing annual tax returns whenever you stop being self-employed in the UK, stop receiving rental income or cease being a company director. 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.
What major changes have been made to landlords this year?
There has been a major shake up to the Buy to Let property sector this year with the newly announced changes affecting many private landlords – it has been estimated that 20% of all UK landlords will be affected.
The main change is that upper rate tax payers in the UK (those paying some tax at 40% and above) will no longer be able to claim all of their mortgage interest as a legitimate business cost. In the past both lower rate and upper rate tax payers could claim full tax relief on their mortgage costs – so either 20%, 40% or 45% depending upon which tax bracket you are in. In the future all landlords will have their tax relief capped at only 20% so these changes will only affect landlords who pay tax at 40% or 45% of their income. The changes will be phased in from April 2017 onwards and will take full effect from April 2020 onwards.
A further big announcement in the 2015 Autumn budget was that from April 2016 the amount of stamp duty paid for any property that will not be your main residence – so a Buy to Let property, holiday let or second home, will increase by 3%. At the moment stamp duty on property increases in tiered stages depending upon the value of the property and from April 2016 all stamp duty brackets will increase by a further 3% for all second homes and investments. The good news is that at present under current tax laws you can claim tax relief on the stamp duty you originally paid when you come to sell the property in the future and become liable for Capital Gains Tax.
If I owe tax to HMRC when will I need to pay this?
All tax due to HMRC needs to be paid in full by 31st January each year at the latest. So for the 2018/19 tax year that ended on 5th April 2019 your UK tax return must be submitted and all tax paid no later than 31st January 2020 to ensure that you avoid penalty charges from HMRC.
- If you are self-employed in the UK
- If you work under the Construction Industry Scheme (CIS)
- If you have a Buy to Let Property – even if the house is currently empty and you haven’t received any rental income
- 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 coming from the UK
- If you receive any income from abroad
What expenses can I claim?
This will very much depend on what sector you work in and we can fully inform you of the type of expenses which are relevant to you. Allowable expenses generally include the purchase of tools and equipment, professional fees such as letting agents or umbrella company costs, travel etc. There is a huge range of allowable expenses which will help to greatly reduce your tax bill so please contact us for more detailed information regarding your area of tax.
What is a personal allowance?
HMRC allows every person to earn a certain amount of money each year which is tax free before any tax is due. For the 2018/19 tax year this is £11,850 per person and in 2019/20 this has increased to £12,500.
In addition to this, if you have made any Capital Gains where you have sold an asset for a profit then the first £11,700 of this is tax free in 2018/19 tax year.
When do I pay for your services?
In most cases you will be invoiced for our services after we have collected all of your income and expense figures for you, we have carried out the basic book keeping that you will need and we have fully prepared your UK tax return ready to send this to HMRC. At this stage we inform you of your tax liability and how much tax you owe, or how much you are due back.
If you owe tax to HMRC then we will invoice you at this stage and then once our invoice is paid we will submit your tax return securely online through the government’s portals.
If you are due a tax refund then you will not be required to pay up front and we will go ahead and submit your tax return online once you have confirmed all of the relevant figures. When your tax refund is released we will collect our invoiced fees and forward the rest on to you.