Self-Assessment Tax Return Obligations and Guidelines

Emma's Self-assessment Tax Return Responsibilities

Let’s illustrate through an example: Emma began renting a property in September 2022 for £15,000 per annum, with allowable expenses of £3,000 annually. Her other income is already subject to her personal allowance and basic rate tax band, so her rental income will be taxed at the higher rate of 40%. Emma has not previously filed a self-assessment tax return.

Before 5th October 2023 – Self-assessment Tax Return Notification

Emma must notify HMRC about her untaxed income source within six months after the relevant tax year ends. Since her rental income profits first arrived in the tax year ending on 5th April 2023, she needs to notify HMRC no later than 5th October 2023 using HMRC’s SA1 form available on the Government website.

Before 31st October 2023 – Optional Paper Tax Return

If Emma wishes to complete a paper tax return and/or have HMRC calculate her tax liability, she must file the 2022/23 paper tax return by 31st October 2023. Filing it after this date incurs a £100 penalty.

Before 30th December 2023 – Optional Inclusion in PAYE Code

If Emma’s liability is under £3,000 and she wants it included in her PAYE code for 2024/25, she must either file a paper return by 31st October 2023 or an electronic return by 30th December 2023.

Before 31st January 2024 – Electronic Tax Return

If Emma hasn’t filed a paper tax return by 31st October 2023, she must submit an electronic tax return by 31st January 2024 to avoid a £100 penalty.

Emma’s Tax Liabilities

Assuming her income remains consistent until at least 5th April 2024, her tax liabilities will be as follows:

2022/23: £2,800 (Profits to 05/04/23 – £7,000 at 40%)
2023/24: £4,800 (Annual Profits of £12,000 at 40%)
When is Her Tax Due?

If Emma is employed, her income tax will be collected through PAYE. She can include her 2022/23 liability of £2,800 in her 2024/25 code if her self-assessment tax return is filed by 30th December 2023.

However, if her self-assessment liability exceeds £3,000, she won’t be able to include it in her PAYE code. In that case, she’ll have to pay it on 31st January 2025, alongside her 2023/24 liability of £4,800.

For the Self-assessment Tax Return or If Emma Is Not Employed

If Emma is not employed or if her liability is over £3,000, she must pay her tax liability on 31st January following the end of the tax year. No payments on account are necessary if the liability is less than £1,000 or 20% of the total tax and Class 4 NIC before any tax deducted. Otherwise, payments on account are due in two installments on 31st January and 31st July.

What If You’re Late?

Failing to file your self-assessment tax return on time results in penalties. There’s a £100 non-refundable penalty if it’s not filed by the due date (usually 31st January after the tax year). Additional penalties apply for further delays.

What to Do If You Can’t Pay

If you can’t pay, try making arrangements with HMRC. There’s a Business Payment Support Service Helpline available at 0300 200 3835.

Records and Making Tax Digital

Keeping accurate income and expense records is essential. From 6th April 2026, those with gross rental income exceeding £50,000 must maintain digital records and report quarterly to HMRC. From April 2027, this requirement applies to those with rental income over £30,000.

Capital Gains Tax (CGT)

For UK residents, reporting and paying CGT on residential property sales within 60 days of completion is mandatory. Non-residents must do the same for any UK property sale, residential or commercial, within 60 days. Late filing incurs penalties.

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