What is a Self-Assessment Tax Return?
A self-assessment tax return, also known as “Personal Tax Return”, is the process in which individuals can declare their annual tax on income received or gains/profits made on their capital investments.
Some taxes, like PAYE, are collected at source, i.e. employees’ taxes are deducted before pay.
However, income is not taxed at source in other cases, such as property rental income, sole trader business income, investment income such as bank interest and dividends, or sale of an asset that increased in value (e.g. Buy-to-let property). Instead, it must be declared on a Self-Assessment Tax Return, and any additional taxes paid.
Who needs to do a Personal Tax Return?
You will need to do a tax return during the financial year ending 5th April:
- Self-employed sole traders who are running their own business or service
- Partner in a partnership
- Received more than £2,500 in untaxed income (e.g. you received rental income from property)
- Investors with dividend income
- Your savings income or investment income was more than or equal to £10,000 before taxes
- You realised profits from selling assets such as buy to let property or shares
- Received child benefit when your income was over £50,000
- Received income from abroad on which you need to pay UK tax on
- You lived abroad but received income from the UK
- You are a trustee
There may be other reasons you may need to do a Personal Tax Return, for example, you may need to do a personal tax return to declare additional payable or reclaimable taxes.
If you need to submit a Personal Tax Return?
If an individual becomes chargeable to Income tax or Capital Gain Tax for the first time, they must notify HMRC within six months of the end of the tax year (5th April) in which it becomes chargeable.
For example, an individual who received dividend income on the tax year 2023-24 has until 5 October 2025 to notify HMRC. To file a tax return, you need to be registered for self-assessment and have a UTR or Unique Tax Identifier number.
A self-assessment registration form is submitted for a UTR number and can take up to 6 weeks for a UTR number to be issued by HMRC.
