Do I need to complete a tax return?
A Tax Return is compulsory if you have:
- Self-employed income above £1,000;
- Are a company director; or
- Have land / property income
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return
However, in some cases you don’t have to complete a tax return, and it’s often a great relief to discover you no longer need to. For example, as long as your interest and investment income is under £10,000 then usually no tax return is required.
Deadlines
The usual deadline of 31st January (for online Self-Assessment tax returns) does not apply to communication via letter, but don’t delay unnecessarily.
Should you choose to send a paper tax return, it must reach HMRC by midnight on 31 October. If HMRC requests that you complete a tax return you will usually be given a deadline of 3 months from the date of the request. https://www.mitchellcharlesworth.co.uk/resources/articles/a-guide-to-self-assessement-tax-returns/
If you don’t need to complete a tax return, you can instead send a letter if you wish to communicate with HMRC.
You should tell HMRC about your charitable donations and personal pension contributions, if you are a higher or additional rate taxpayer, and we provide an example below, with useful notes.
You may prefer to register for a Personal Tax Account (via Government Gateway), where you can inform HMRC of future changes to income, interest and donations online. This would save the need for future letters.
Charitable donations
Anyone who makes a gift aid donation needs to be charged at least an equal amount of income tax and / or capital gains tax as is deducted from all their gift aid donations – so this means that broadly speaking, your combined donations should not be more than 4 times the amount of tax you paid in the tax year of the donations (6th April - 5th April). If insufficient tax is charged you may owe HMRC the difference, and you should tell the charity about any tax years where you did not pay enough tax.
https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-3-gift-aid
Remember that you need to make a Gift Aid declaration in order for the charity to claim. You can include donations from the last 4 years.
You can also elect to treat the gift as if made in the previous tax year, providing sufficient tax was paid in that year to cover both any gift aid gifts made that year, plus the gifts being backdated. The election must be made before or at the same time as the previous year tax return and no later than the filing deadline (31 October for a paper tax return, or 31 January for online in the tax year in which the gift is made).
Higher and Additional rate taxpayers can receive tax relief on their charitable donations.
HMRC may ask you to complete a P810 form, or you can use this form to claim tax relief on your contributions, if you don’t complete a tax return. You’ll need to submit it by 31 January after the end of the previous tax year. HMRC can be contacted on 0300 200 3300.
https://www.gov.uk/donating-to-charity/gift-aid
Example Letter Text:
From: Your name & address
To: HMRC
Pay As You Earn and Self Assessment
HM Revenue and Customs
BX9 1AS
Date
Dear Sir/Madam
Re: National Insurance Number:
All the figures below are for the 2020/21 tax year (i.e. 6.4.2020 – 5.4.2021)
I wish to let you know the amount of interest I earnt and also the charitable donations / pension contributions I have made.
My pension income was: £XXXXX before tax which includes the State Pension / My earned income was £XXXXX Delete as applicable; remember to include any bonuses
I have contributed £XXXX net to my Personal Pension. This is the amount you paid to your pension provider, before tax relief was added. This should not be for employer pension schemes, just those you hold personally. Any claim must be made within four years of the end of the tax year that you are claiming for.
I received the following gross interest from cash on deposit: £XXXX Interest has been paid gross by savings accounts since 6.4.2016. Please reference the interest statements from your savings account providers for the actual total figure. You need to declare annual interest even if it has been added to the account itself, rather than paid out to you. ISA interest can be ignored.
I made the following charitable donations: £XXXXX Use actual figure you donated to the charity, i.e. before Gift Aid was added
Please note that this communication does not constitute taxation advice. Should you require taxation advice please speak to a taxation specialist or accountant. Any personal advice in respect of taxation is not regulated by the Financial Conduct Authority. Any taxation rates, allowances and other information referred to in this document are understood to be correct at the time of publication but may be subject to change at short notice. We therefore cannot be held responsible for the implications of relying on this information. Further information about taxation rates, allowances and protections are available at https://www.gov.uk.
Further information about taxation rates, allowances and protections are available at https://www.gov.uk.
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