Might be you have heard about self-assessment return of tax, but what is meant by it, and how does you know if you require this.
If you are confused about self-assessment returns of tax and you wish to discover whether you require submitting the self-assessment tax return, this blog will answer all of your queries.
Self-assessment is the important system deployed by the HMRC (HM Revenue and Customs) for collecting the income tax.
Most of the employees pay taxes via the PAYE (Pay as You Earn) system. When you receive your salary or paycheck from your employer, the HMRC system will automatically deduct taxes, which need to pay by you, from it.
Who requires submitting the Self-Assessment Return of Tax?
The important rule is any person who is employed as per the PAYE system need to file the self-assessment tax return. This also includes those persons who are doing freelancing work or are currently self-employed.
Before the tax you had investment income or savings of around £10,000 or higher.
You are having an untaxed income of higher than £ 2,500.
Your total income for the year is more than £ 100,000.
Your partner or you earn more than £ 50,000 and claims the child benefits.
How to send the return of tax?
The first step is to search your UTR (Unique Tax Number).
After you created the account, an activation code is send to you by HMRC via post. This code will come after many days. After receiving the code, you can easily login to your account.
The self-employed new businesses need to register themselves with the HMRC. You can perform this via phone, post or online.
You need to ensure that you don’t leave any of the steps given above. The entire process can take many weeks to complete.
In the April’s first week, the year of tax is beginning and finishes. If you file the return within less than three months, then you need to pay a fine of £100. To estimate the penalty imposed on you, you can use a calculator, if you are later more than three months.
You need to submit the self-assessment tax return, if there is not any employer, who deducts taxes from your salary. There are various procedures to decrease your bill and you might be qualified for the exception.