Why do I need to complete a tax return?
Posted on 13th June 2023 at 11:49
A question we get asked a lot is – why if all my income is taxed at source do I still need to do a tax return?
Up until the tax year ending 5th April 2023 even if all your income was taxable at source – so from employment and pensions as the main example – if your gross income was over £100k you still were required by HMRC to do a tax return each year. This effectively was just telling them what they already knew.
From the tax year 23/24, this threshold is rising to £150k so will move a number of taxpayers outside of the need to do a tax return going forward, so will be a welcome relief to many who thought it was unnecessary they were being asked to complete a return.
Even within the previous thresholds we still saw a number of taxpayers despite having tax deducted at source, paying the wrong levels of tax through the year so there has been benefit of doing returns still. Our top tips for making sure you are paying the right level of tax if you fall in this bracket:
– Check your tax code – is it accurate for your level of earnings and any reliefs that may be available to you
– Check you are getting reliefs due – pensions, professional subscriptions, expenses claims and mileage are just a few examples of what can benefit your tax position if they aren’t being treated correctly
– Gift Aid – if you are making donations to charity and ticking that gift aid box – there may be some tax relief.
If you are unsure whether you will be affected or whether it would be beneficial for you to continue completing a tax return, please get in touch with us.
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