Maximize Your Tax Returns with HMRC Self Assessment: A Comprehensive Guide
Filing your tax returns can be a daunting task, but it is a necessary one. The HM Revenue and Customs (HMRC) in the UK requires taxpayers to file their tax returns annually. This process is known as self-assessment. Self-assessment is a way for taxpayers to report their income, gains, and losses to HMRC. It is also a way for taxpayers to claim tax reliefs and allowances. In this article, we will provide a comprehensive guide on how to maximize your tax returns with HMRC self-assessment.
Who Needs to File a Self-Assessment Tax Return?
Not everyone needs to file a self-assessment tax return. You only need to file a tax return if you fall into one of the following categories:
- You are self-employed or a sole trader
- You are a partner in a business partnership
- You are a company director
- You have an annual income of £100,000 or more
- You have income from savings, investments, or property
- You have income from overseas
- You have income from trusts, settlements, or estates
- You have capital gains tax to pay
- You have claimed expenses or reliefs of £2,500 or more
If you are unsure whether you need to file a self-assessment tax return, you can check on the hmrc.gov.uk self assessment website.
When is the Deadline for Filing a Self-Assessment Tax Return?
The deadline for filing a self-assessment tax return is 31st January following the end of the tax year. For example, the deadline for filing a tax return for the tax year 2020/2021 is 31st January 2022. It is important to file your tax return on time to avoid penalties.
How to File a Self-Assessment Tax Return
There are two ways to file a self-assessment tax return: online or by paper. Filing online is the most convenient and quickest way to file your tax return. You can file your tax return online on the hmrc.gov.uk self assessment website. To file online, you will need to register for a Government Gateway account. Once you have registered, you can log in and file your tax return.
If you prefer to file by paper, you can download a tax return form from the hmrc.gov.uk self assessment website. You will need to fill in the form and send it to HMRC by post.
Maximizing Your Tax Returns
To maximize your tax returns, you need to ensure that you claim all the tax reliefs and allowances that you are entitled to. Here are some of the tax reliefs and allowances that you may be able to claim:
- Personal Allowance – this is the amount of income you can earn before you start paying income tax. For the tax year 2020/2021, the personal allowance is £12,500.
- Marriage Allowance – if you are married or in a civil partnership, you may be able to transfer some of your personal allowance to your partner if they earn less than you.
- Employment Expenses – if you are an employee, you may be able to claim tax relief on expenses that you have incurred in the course of your work.
- Self-Employed Expenses – if you are self-employed, you may be able to claim tax relief on expenses that you have incurred in the course of your business.
- Capital Allowances – if you have bought assets for your business, you may be able to claim capital allowances on them.
- Charitable Donations – if you have made donations to charity, you may be able to claim tax relief on them.