Why is this important?
Table of contents
A tax return is a form (paper or online) on which you:
- report details of your taxable income, and any capital gains if appropriate
- claim tax allowances and tax reliefs.
HM Revenue and Customs (HMRC) may issue a tax return to you each tax year. The tax year runs from 6 April one year to 5 April the next. If you receive a tax return, the law says you must fill it in.
HMRC uses the information on your tax return to work out your tax bill or work out whether you are due a tax refund.
Most taxpayers do not have to fill in a tax return. If HMRC thinks you are paying the right amount of tax through the Pay As You Earn (PAYE) system on your wages or salary, or on an occupational pension, they will not send you a tax return.
For more information about PAYE, see The Pay As You Earn - PAYE - system.
However, HMRC will issue annual tax returns if you:
- are self-employed
- are a company director (but not if you are a director of a not-for-profit company)
- have rental or other income from property (unless it is less than a certain amount and can be dealt with through a PAYE tax code)
- have other income which is not taxed before you get it and the tax cannot be collected through the PAYE system
- have to pay extra tax from 7 January 2013 because your household receives Child Benefit and someone in your household has a taxable income above £50,000. For more information, see Child Benefit and tax if you have a high income.
If you are a pensioner
Most pensioners do not fill in tax returns. However, tax-free allowances for people 65 or over are based on annual income so a tax return may sometimes be necessary.
If you're a pensioner whose only source of taxable income is your State Retirement Pension, you have to fill in an annual tax return if the amount you receive is higher than your tax-free personal allowances. This is because the Department for Work and Pensions (DWP) which pays the State Retirement Pension does not deduct any tax before the pension is paid.
If you have not received a tax return
It's your responsibility to inform HMRC that you have received income on which tax is payable. You should do this at the latest by 6 October following the end of the tax tear in which your income first arose.
If you have not received a tax return but you think you should fill one in, phone or write to your tax office if you know their contact details. Or phone the HMRC helpline on: 0845 9000 444 and ask for a return to be sent to you. Do not wait for HMRC to contact you. If you send in the tax return late, you may have to pay:
- interest on any tax paid late, and
- a penalty.
If you think you have paid too much tax
If you think you have paid too much tax, do not assume that HMRC will find this out automatically. Contact your tax office if you know their details or phone the HMRC helpline on: 0845 9000 444 and ask for a tax return to be sent to you.
If you don't think you should fill in the tax return
If you have been sent a tax return but you don't think you should have to fill it in, do not just ignore the tax return. If HMRC does not receive the tax return by the date it has to be returned, they will issue an automatic penalty.
If you get a tax return that you think you shouldn't have to fill in, contact HMRC. The correct phone number will be printed on the front of the form. If they agree that you shouldn’t have to fill in the form, they will confirm this in writing.
More information about who should fill in a form
You can get more information about when a tax return is needed on the HMRC website at: www.hmrc.gov.uk.
You can complete your tax return on paper or online using HMRC software or commercial software.
There are different dates for sending back paper and online tax returns. These dates are called the filing dates. A paper tax return must be received by HMRC by 31 October following the end of the tax year. An online tax return must be received by HMRC by 31 January following the end of the tax year.
There are strict penalties for sending in a tax return late. These are as follows:
- one day late - £100 penalty, even if you don't have any tax to pay or have paid all the tax you owe
- three months late - an automatic penalty of £10 a day up to a maximum of £900, in addition to the penalty above
- six months late - five per cent of the tax due or £300, whichever is greater, in addition to the penalties above
- twelve months late - a further five per cent of the tax due or £300, whichever is greater, in addition to the penalties above.
You may have to pay these penalties even if you don't owe any money to HMRC, or they owe you a refund. This means that you could end up paying up to £1,600 in penalties regardless of how much tax you need to pay.
If you're having problems completing your tax return, you should get help as soon as possible. For more information, see Help with tax problems.
You can appeal against the penalty to have it removed. To be successful, you will need to show that you had a reasonable excuse for not filing your tax return on time.
The paper tax return
So long as you send your paper return by the filing date of 31 October, HMRC guarantees to calculate your tax bill and let you know the result before the payment date of 31 January following the end of the tax year. HMRC calculates the tax bill of every tax return they process. However, if you file a paper return after 31 October, they cannot guarantee to tell you the result in time for any 31 January payment.
If you wish to calculate your tax bill yourself, you can ask the HMRC Orderline on 0845 9000 404 for the Tax Calculation Summary supplementary pages and notes to work out your tax bill. You do not have to send back these pages as part of your tax return.
The online tax return
To use the HMRC online return service, you will first have to register. Go to the HMRC website at: www.hmrc.gov.uk and follow the registration process. You will have to wait for up to seven days for a Personal Identification Number so do not leave registering for online filing until 31 January. If you do, your return will be late and you will incur a late filing penalty.
The online tax return will ask you a series of questions to bring forward only the relevant parts of the tax return. It will do the calculations for you and provide on-screen help as you go along. There are other built-in checks to help you get it right.
Your tax bill will be worked out automatically and you will receive an acknowledgement that your tax return has been safely received.
By law, you must keep the records you need to fill in a complete and correct tax return. If your return is incomplete and you are then found to owe tax, you may also have to pay interest and a penalty. You can find further information about the records you need to keep on the GOV.UK website at www.gov.uk.
Use of provisional and estimated figures
If you're waiting for some of the information you need for your tax return, you may provide provisional figures, so you don't delay filing your tax return. You should draw attention to this in the Any other information box on a paper return or in the white space on an online return. You should replace any provisional figures with the final ones as soon as you know them.
You may sometimes have to estimate an amount, for example, the private proportion of motoring expenses or the costs of using your own home for business. These figures need not be replaced and you may not have to draw attention to this kind of estimate. There is guidance about this on the tax return.
If you or HMRC find a minor error on your tax return, it can often be put right by a phone call.
If your income was overstated and you have paid more tax than is due, HMRC will repay the amount overpaid with an appropriate amount of interest.
If there has been a significant error resulting in under-declared income, HMRC may consider this to be grounds for opening an enquiry. If the error is due to negligence or fraud, you may have to pay a penalty, as well as interest on tax paid late. You can get more information about HMRC enquiries from the website the Low Incomes Tax Reform Group at: www.litrg.org.uk.
If HMRC opens an enquiry into your tax situation, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.