skip to navigationskip to main content

Phone: 01793 852121 


What Is Tax Return?

People often get frustrated by tax documents because they are complex and confusing. The tax laws do more than just add up your income and determine if you were taxed by the right percentage; they also include deductions and additions for specific actions. Work-related expenses, like rent or gas mileage, can be deducted by self-employed individuals. It is possible to reduce your payment with deductions if you want to maximize your government return. However, deductions can be very confusing.

A tax return is generally required in the UK each year by some individuals. An income and capital gains declaration form is used for declaring income and gains for a tax year. Tax aid and relief can also be claimed with and through the form. If you submit the form by email or paper, HM Revenue and Customs (HMRC) will process it. Calculate the tax you have to pay using the information you provide on your tax return. It is your responsibility to declare your taxable income, so the process involves compiling your self-assessment. A tax return represents all taxable income you generated for the year. It does not just record income from sources that HMRC already holds information about (such as employment income).

Tax is paid at source in the UK, for example, through Pay As You Earn (PAYE) if you are employed, so you do not have to file a tax return. In complicated tax situations, however, you are required to file a formal tax return. It may be difficult for you to deal with foreign earnings if you receive them.

Tax calculation summary

What is Self Assessment?

Self Assessment tax returns tell HMRC how much you earned and how much you gained during the tax year. Working out and paying what you owe is a necessary part of the process.HMRC will send you a letter requesting that you file a tax return if it has sent you a notice to do so. This is the case unless HMRC agrees to cancel the return. The most common situation where you need to file for one include but are not limited to:

  1. You are self-employed 
  2. Your business is a partnership
  3. As a director of a company, you have income for which tax is due but is not subject to Pay As You Earn (PAYE) tax.
  4. Savings are not taxed in your case. You can probably avoid a full tax return for small amounts of income, but you must always report savings income of over £1,000 per year (or £500 if you pay tax at the higher rate) and dividend income of over £2,000 per year to HMRC

You will need to ask HMRC to cancel the filing requirement if, despite the tool’s warning, you still need to complete a tax return. A penalty may be imposed if you do not comply.

You should ask HMRC to cancel your requirement to submit a tax return if you are already late with filing your tax return and have been charged a penalty for late filing, but the tool suggests you don’t need to complete a tax return for the year. The late filing penalties will be automatically waived if they agree to do so. HMRC cannot cancel late filing penalties after you have filed a return, so you must appeal against them instead. Therefore, it is important to try to resolve this before you file the return.

Do I have to complete a Tax Return?

It is probably not necessary to complete a tax return if all your income comes from the UK with tax deducted at the source regardless of whether you reside in the UK or not. It is important to note that all self-employed individuals in the UK have to submit a tax return, even those who pay tax at source under the Construction Industry Scheme (CIS).

Another possibility would be to apply for a bank or building society loan. Tax is not withheld at source from these payments, but if they are less than your personal savings allowance, you don’t have to file a tax return. If you have a bank interest balance that exceeds your personal savings allowance, you can ask HMRC to collect the tax under PAYE instead of filing a tax return.

Tax returns are required for UK-based earners who have not been taxed at source, or have been taxed incorrectly, and for whom tax is due. Income such as rental income, investment income, or perhaps employment income that has not been taxed correctly under PAYE can be included in this category.

GOV.UK provides a tool to help you decide if you need to file a Self Assessment tax return. If you complete the tax return tool and are not required to file a return, we recommend taking a screenshot or printing the page for your records. The deadline to file a tax return has not yet expired if HMRC has issued a formal notice to do so. If HMRC withdraws that notice, you must file a tax return.

Generally, it is the taxpayer’s responsibility to notify HMRC if they need a tax return completed. To avoid penalties, you should file your tax return by 5 October following the end of the tax year.

How to process a Tax Refund?

Essentially, a tax refund is a refund you receive from HMRC because you overpaid taxes. The following reasons might make you eligible for a tax refund:

  1. Following the filing and payment of your tax return, you decided to modify it
  2. HMRC has overcharged you for taxes owed
  3. There are no longer any requirements to complete a Self-Assessment, but you have paid your account in full

If you are filing your Self Assessment tax return, then you will need to ensure that you fill out boxes 4 – 14 on page 6 (SA100) because this will determine how you will receive your tax refund.

Perhaps you are eligible to receive a tax refund for overpayments made previously? If you have overpaid tax, you have four years from the end of the tax year to claim your refund. Be sure to check back to avoid missing out.

Depending on how you requested a refund, there is a difference in waiting periods for tax refunds. Normally it takes five working days in UK bank accounts, while it can take up to five weeks if it is through cheque.  

You may need to wait a little longer if you have complicated financial affairs because refund checks and assessments may halt the refund process.

Filing your tax obligations should not be taxing. If you are unsure of what to do, feel free to schedule an appointment with us to create a workaround in your case.

Choosing a Service

Choosing an accountant that matches your needs

What Our Clients Say

Read the reviews from some of our satisfied clients


Free Initial Consultation

Understanding your accountancy requirements

Request a Callback

Lets talk at a more convenient time for you

Understanding your accountancy requirements

Arrange a free consultation

We’re a dedicated team which strives to provide success to our clients in regards to all their accountancy needs.

Meet our team