Month: August 2023

There are a number of reasons why you might need to complete a Self-Assessment return for the first time. This includes if you are self-employed, have an annual income over £100,000 and / or have income from savings, investment or property.

Taxpayers that need to complete a Self-Assessment return for the first time (for the 2022-23 tax year) should inform HMRC as soon as possible. The latest date that HMRC should be notified is by 5 October 2023.

HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a Self-Assessment return.

The following list summarises some of the reasons when taxpayers are usually required to submit a Self-Assessment return:

• newly self-employed (earning more than £1,000);
• individuals with multiple sources of income;
• taxpayers that have received any untaxed income, for example earning money for creating online content;
• individuals with income over £100,000, and note, that from tax year 2023-24 the Self-Assessment threshold for individuals taxed through PAYE only, will change from £100,000 to £150,000;   
• those who earn income from property that they own and rent out;
• who are a new partner in a business partnership;
• taxpayers whose income (or that of their partner’s) was over £50,000 and one of you claimed Child Benefit;
• those receiving interest on savings or investment income of £10,000 or more before tax;
• taxpayers who made profits from selling things like shares, a second home or other chargeable assets and need to pay Capital Gains Tax; and
• taxpayers who are self-employed and earn less than £1,000 but wish to pay Class 2 NICs voluntarily to protect their entitlement to State Pension and certain benefits.

If you are an employee that needs to buy substantial equipment to use as part of your employment you may be able to claim tax relief. In most cases you can claim tax relief on the full cost of this type of equipment. Tax relief is reduced if your employer provides a financial contribution towards buying the item.

The way to claim tax relief depends on the amount you are claiming. HMRC provides the following information on making a claim:

Claims up to £2,500

You can make your claim:

• Using a Self-Assessment tax return if you already file a return.
• By using HMRC’s online service or by printing and posting form P87 if you do not file a tax return.
• By phone if you have had a successful claim in a previous year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions).

Claims over £2,500

• You can only claim using a Self-Assessment tax return. You need to register if you do not file a return.

There are different rules if you are an employee using your own uniforms, work clothing and tools for work. You cannot claim relief on the initial cost of buying small tools or clothing for work. However, it is possible to claim for the cost of repairing or replacing small tools you need to provide as an employee (for example, scissors or an electric drill), or cleaning, repairing or replacing specialist clothing (for example, a uniform or safety boots). A claim for valid purchases can be made against receipts or as a 'flat rate deduction'. 

You have four years from the end of the tax year to make a claim. For example, there is a deadline of 5 April 2024 for making a claim dating back to the 2019-20 tax year. 

The Let Property Campaign provides landlords who have undeclared income from residential property lettings in the UK or abroad with an opportunity to regularise their affairs by disclosing any outstanding liabilities whether due to misunderstanding of the tax rules or due to deliberate tax evasion. Participation in the campaign is open to all residential property landlords with undisclosed taxes. The campaign is not suitable for those letting out non-residential properties.

Landlords who do not avail of the opportunity and are targeted by HMRC can face penalties of up to 100% of the tax due together with possible criminal prosecution. Taxpayers that come forward will benefit from better terms and lower penalties. Landlords that make an accurate voluntary disclosure are likely to face a maximum penalty of 0%, 10% or 20% depending on the circumstances of their disclosure. The penalties would be in addition to the tax and interest due. There are higher penalties for offshore liabilities. 

There are three main stages to taking part in The Let Property Campaign:

1. notifying HMRC that you wish to take part;
2. preparing an actual disclosure; and
3. making a formal offer together with payment.

The campaign is open to all individual landlords renting out residential property. This includes landlords with multiple properties and specialist landlords with student or workforce rentals. Once HMRC have been notified of the wish to take part in the campaign, landlords usually have 90 days to calculate and pay any tax owed.