Contrary to what most persons may think, not everyone is required to file a federal tax return, and according to the HMRC, several persons who are not required to file a tax return do so because they are unaware of what’s required of them. Therefore in this article, we will be taking a look at persons who are required to file a tax return.
You are required to file a tax return for the previous year if:
• you earned over £1,000 from self-employment – this qualifies as your ‘trading allowance.’
• you earned over £2,500 from putting your property on rental
• you earned over £2,500 from untaxed income like commissions or tips
• your income from savings or investment was £10,000 or more before tax including money from bare trusts or interest in possession trusts.
• your earnings from dividends from shares was £10,000 or more before tax
• you earned profit from selling trading in shares, real estate or other capital assets and need to pay capital gains.
• your income (or partners) was over £50,000, and either of you claimed child benefits
• you had earnings from abroad which you needed to pay tax on
• your taxable income was over £10,000
• you were trustee or trust to a registered pension scheme or trust
• you did not pay enough in tax the previous year
• your state pension was greater than your personal allowance and was your only source of income
You would also be required to send in a tax return if you:
• need to prove you are self-employed
• want to make voluntary Class 2 National Insurance payments, so you qualify for benefits