When Someone is Subject to Self Assessment Tax in the UK?

When Someone is Subject to Self Assessment Tax in the UK?

Self Assessment Tax is compulsory in the UK if you have undeclared taxable income. In this article, we have a brief on self assessment tax basics including what does it mean, when you are subject to this and the deadline for compliance.  

What is Self Assessment Tax?

The Self Assessment is a tax system that HMRC uses it to collect the income tax from Individuals here in the UK. You need to inform HMRC every year about your taxable income and any gains via self assessment tax system. You also need to pay any tax that you owe.  

When You are Subject to Self Assessment Tax?

You must submit your self assessment tax return If you have any untaxed (taxable) income or HMRC sent you notice to file your tax return. We have listed some common situations as follows when you might be subject to self assessment:

  • You are director of a company and having taxable income that is not taxed under PAYE tax system
  • You have land and property rental income in the UK. However, you don’t need to submit if your income qualifies for rent-a-room relief or income within annual property allowance of £1,000
  • You get taxable foreign income more than £300 a year
  • You receive annual income from trust or settlement
  • Your annual income exceeds £100,000
  • Your annual income is over £50,000 and you or your partner is getting Child Benefit payments
  • You have Capital Gains Tax (CGT) to pay on your assets’ disposal
  • You are sole trader or partner in a partnership business. No need to submit the tax return if your self-employed income is within trading allowance of £1,000
  • You are claiming tax relief on employment expenses of over £1,000 (£2,500 for professional fees and subscriptions) a year.
  • You have untaxed savings income more than £1,000 (£500 if you are higher taxpayers)
  • You have dividend income that more than dividend allowance of £2,000

Please note that this is not a complete list when you are subject to self assessment Tax and hence, please check with tax advisors or look HMRC website for more.

Self Assessment Tax Deadline?

You have compliance to meet the deadline for your self assessment. In the UK, the tax year starts on 06 April and ends on 05 April. Here is the key deadline for tax year ended 05 April 2022:

  • Register Self Assessment – 05 October 2022
  • Submit the tax return (paper) – 31 October 2022
  • Submit the tax return (online) – 31 January 2023
  • Pay the tax you owe – 31 January 2023

Failure to comply with your self assessment, you may have to pay interest with penalties and that may be costly. To have specific information suited to your circumstances, please get in touch with your tax advisors.

Looking for Self Assessment Tax Service?

The Stan Lee prides to offer confidently the self assessment tax service so that you have one step less stress on your personal tax compliance. We try our best to ensure that you meet your tax obligations and find the legitimate way to save your tax. Please contact us and let’s find out how we can support on your self assessment tax requirements.