It’s a question we’re often asked as Accountants “Do I need to complete a self-assessment tax return?”
Usually the answer is a simple “Yes” or “No” but a recent change in legislation coupled with an apparent change of heart of H M Revenue and Customs has introduced a third answer.
“Maybe.”
The element of doubt has been introduced for two reasons.
Firstly it has been well publicised that following the restriction in the availability of Child Benefit for higher-rate earners, anyone who received Child Benefit and is a higher-rate taxpayer had to register under Self Assessment (if not already registered) by 5 October 2013. Whilst this is a hassle for most, some taxpayers won’t know if they are liable to higher rate tax until they get all of the information together. In this case they are already late in registering and so face penalties as well as having to repay some (or all) of the Child benefit received!
Secondly, in a recent development HMRC have been contacting employees who have never previously been required to file a self assessment return and giving them the ‘good news’ that they now also fall into the net. It transpires that if an employee has over £2,500 of expenses recorded on their P11d (even if successfully claimed as business expenses) they can be required to complete a tax return and HMRC have suddenly decided to invoke this.
This change of heart by the Inland Revenue seems a little odd as the vast majority of these employees will have no additional tax to pay as it will already have been accounted form under PAYE and through the tax code.
Our Personal Tax team have received numerous calls recently from people now being forced into Self Assessment and if this is you, or you know someone who is facing either of these challenges please get in touch with us urgently. We can be contacted at your local office, on 0845 177 5500 or using our online form.