sources of passive income
7 not so obvious sources of passive income

Filing tax returns can be daunting, especially if it’s your first time. However, with time you will realize how straightforward the whole process is. The process is even simpler when you have an idea of the tax options that apply to you. Depending on whether you are self-employed, in a partnership, or non-self-employed, the tax returns vary significantly.

The following are some of the reasons to file a self-assessment tax form:

  • You make a total of £1,000 from self-employment before taxes.
  • You earned more than £2,500 from tips and commissions.
  • You earned more than £ 2,500 from an investment property; contact HRMC if it’s below this amount.
  • You are the director of a profit-motivated company.
  • You earn more than £100,000 from either government employment or self-employment.
  • You are a trustee for a trust fund or registered pension plan.
  • You are a non-citizen who lives and works in the UK or has business there.
  • If you get a notification from HRMC that you did not pay enough tax for the past financial year.

Fortunately, Her Majesty’s Revenue and Customs (HRMC) have a self-assessment tax return service online. With the help of the GoSimpleTax mobile app, you can effortlessly file your returns within a day.

This online service is for self-employed individuals to pay income tax and National Insurance for their profits. Ideally, government employees’ taxes and insurance payments are deducted from their salaries directly through Pay as You Earn. As a result, these employees do not have to file their taxes manually.

How do You Register for a Self-Assessment Tax Return

Usually, you will go to the HMTC’s website and click on register. After registration, you get your Unique Taxpayer Reference (UTR). Whenever you want to submit the self-assessment form online, you shall need your Government Gateway Account. The instructions on how to set up this account will be in the email with your UTR number.

Always ensure you can log into the gateway account before submitting your form to avoid any delays. Preferably, file this form before the deadline on April 5th (the beginning of a new financial year).

What You Will Need to File the Returns

If it’s your first time filling in a self-assessment tax form, make sure you have the following:

  • Your Unique Taxpayer Reference (UTR).
  • Your National Insurance number.
  • Details of all your untaxed income, including dividends, self-employment, and shares.
  • Contributions to charity eligible for tax relief.
  • Receipts to indicate that your other income has got taxed already.

Whenever you are entirely confused, read HRMC’s help sheets found on the different sections of their website. These pages have detailed instructions and explanations on why you are filling particular taxes.

There are several sections you can opt to fill depending on your income. These sections include the SA100, income declaration, charities, and child benefits.

If you would like to know how to fill them, go to the HRMC website and read the complimentary pages. Then, after filling the statement form, you are at liberty to pay the total bills at any time before January 31st.

Final Thoughts

Tax is a priority debt, so if you can’t pay, call the business tax payment support and explain your plight. Otherwise, HRMC will have to resort to forceful collection means, including direct withdrawals from your bank account, pension, or repossession. In the worst-case scenario, you could get sued for tax evasion, which is a criminal offense.

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