Do I need to complete a tax return in the UK?
Many people in Bristol think they don’t need to file a tax return because their taxes are handled automatically.
However, there are certain situations where you might need to fill one out. Let’s break down when you need to file a tax return, how to do it, and why it matters.
Who needs to file a tax return in Bristol?
Not everyone in Bristol has to complete a tax return, but certain people do. Let’s look at the main reasons why you might need to file one:
Self-employed individuals
If you’re self-employed, like a freelancer or someone running their own business in Bristol, you’ll need to fill out a tax return. This is because you’re responsible for reporting how much money you make to HMRC (the UK tax office).
People with high income
Even if you have a regular job and your taxes are taken from your salary automatically, if you earn more than £150,000 a year, you still need to complete a tax return.
Company directors
If you’re the director of a company in Bristol, you’ll likely need to file a tax return, even if you don’t have to pay extra tax.
Those with untaxed income
If you make money that isn’t automatically taxed, such as renting out a property in Bristol, earning from investments, or receiving dividends, you’ll need to declare this through a tax return.
Individuals with capital gains
Selling something like property or stocks and making a profit is called a capital gain. You'll need to report these gains and file a tax return if either:
- Your total capital gains (profits) are over £3,000 in the tax year, or
- The total amount you received from selling your assets (total proceeds) exceeds £50,000
If your gains and proceeds are below both these thresholds, you don't need to report them or file a tax return for capital gains.
Special circumstances that may require a tax return
Some people in the UK don’t fall into the typical categories but still need to file a tax return because of special situations:
Claiming tax reliefs
If you’re claiming tax relief (like for pension contributions or charity donations), you might need to file a tax return to get those tax benefits.
Child benefit recipients
If you or your partner have an adjusted net income of more than £60,000 and receive child benefits, you’ll need to fill out a tax return because of the High-Income Child Benefit Charge. This is an extra tax on child benefits for high earners.
Foreign income
If you’ve made money from outside the UK, such as working abroad or owning overseas investments, you may need to file a tax return to report that income.
Watch this video to find out if you need to declare foreign income and why.
PAYE employees and tax returns in the UK
When PAYE is enough
Most people in Bristol who work for an employer have their taxes handled by PAYE (Pay As You Earn). This means their taxes are deducted directly from their salary, and they don’t need to file a tax return.
When PAYE employees still need to file
Even if you’re on PAYE, you might still need to file if you:
- Have more than one job or other sources of income
- Earn interest from savings or investments
- Make more than £150,000 a year
Filing your tax return
Deadlines and penalties
Important deadlines
You need to know the key dates for submitting your tax return:
- Paper returns. Must be submitted by 31st October after the end of the tax year.
- Online returns. Must be submitted by 31st January following the tax year.
Penalties for failing to file
If you miss the deadline, HMRC can fine you:
- An initial £100 penalty if your tax return is up to 3 months late.
- Additional penalties if it’s delayed further or you owe tax.
What information do you need to complete a tax return?
When filing your tax return, you’ll need to have a few key pieces of information ready:
Income records
Gather your wage slips, P60 forms (which show your income and the tax you’ve paid), and bank statements showing any additional income.
If you dont have your P60, you can go to the HMRC website and use your personal tax account to get the information your P60 would contain.
Expenses and reliefs
If you’re self-employed or claiming reliefs, keep detailed records of your business expenses or eligible contributions (like charity donations or pension contributions).
Capital gains records
If you’ve sold property or investments, make sure you have records of what you originally paid and what you sold them for to calculate any capital gains tax.
How to file your tax return
Online vs paper filing
Most people in Bristol file their tax return online because it’s quicker and easier. You can also do it by post, but paper returns have an earlier deadline.
Step-by-step guide
- Register for an HMRC account if you don’t already have one.
- Gather all your income and expense records.
- Complete your tax return online through the HMRC website.
- Submit it before the deadline!
Seek professional help
If you’re unsure or have a complicated situation, it’s worth talking to a tax accountant to make sure everything’s done correctly.
Need more information? Read our guide on how to do a tax return.
Common myths about tax returns
"I only need to file if I’m self-employed"
Not true! Even if you’re not self-employed, things like high income or rental properties can mean you need to file a tax return in the UK.
"HMRC will tell me if I need to file"
HMRC doesn’t always remind you. It’s up to you to know whether you need to file a tax return.
When should you hire an accountant in Bristol?
Even if you don’t need to file a tax return every year, there are times when getting professional help makes sense.
Income changes or multiple revenue streams
If you’ve recently experienced a significant increase in income or are managing earnings from various sources, like self-employment or freelance work, an accountant can help ensure accurate reporting and optimise your tax position.
Maximising tax reliefs and deductions
Unsure which tax reliefs apply to you? A professional can identify opportunities to reduce your liability, helping you make the most of your earnings.
Investments in property or the stock market
For those with rental properties or stocks, understanding capital gains and rental income taxes can get complicated. Professional advice keeps you compliant and minimises tax obligations.
Approaching higher tax brackets
Growing income can push you into a higher tax bracket, increasing your tax burden. An accountant can help with proactive planning to manage liabilities effectively.
Confused about complex tax rules?
Professional tax advice can help you save money and avoid costly mistakes.
For a stress-free experience, we advise using our recommended provider.
What to do if you’ve never filed a tax return before
If it’s your first time, don’t worry. Follow these simple steps:
- Register with HMRC early to avoid delays
- Gather all your income and expense records
- Follow the steps on the HMRC website, or talk to an accountant if you’re unsure
Year-round tax tips
Many people think about taxes just once a year, but you can make tax time easier by staying organised throughout the year. Here’s how:
Mid-year financial reviews
Take a look at your income and expenses halfway through the year to see if you’re on track.
Keeping accurate records throughout the year
Get into the habit of tracking your income and expenses each month. It’ll save you loads of time and stress when tax season arrives.
How changes in legislation impact ongoing tax planning
Stay updated with changes to tax laws so you can adjust your plans and make sure you’re not paying too much or missing out on any reliefs.
Final thoughts
Filing a tax return may seem overwhelming, but it’s important to know whether or not you need to do it.
By understanding your financial situation, keeping good records, and getting professional help when needed, you’ll stay on top of your taxes and avoid any unnecessary penalties.
Not sure if you need to file? Reach out to a tax expert in Bristol today.
About the author
Jon Dell is a Chartered Accountant who qualified at PwC, the largest professional services firm in the world. He has worked internationally as well as across the public and private sectors. He now has his own practice where he works on both personal and Limited company taxation services. His particular focuses are property income and taxation as well as medical outsourcing companies.
