Taxation of Individuals


Most people pay tax on their income through the PAYE scheme operated by their employer and do not need to complete a tax return. But if you fall under one or more of the categories set out below you will need to complete a tax return after every tax year. This needs to be sent to HMRC together with any tax payment that is due.  This is called Self Assessment. Each tax year begins on 6 April and ends on 5 April the following year 


Who needs to complete a tax return?


  • Anyone who is self employed
  • Anyone who is a company director
  • Those who are both employed and self employed e.g. run a business in the evenings and weekends, for example ebay traders, tutors, coaches
  • Those who earn income from savings and investments over £10,000
  • Those who earn income from property over £10,000 before allowable expenses
  • Those who earn income from property over £2,500 after allowable expenses
  • Those who earn income from abroad e.g. rent from a property abroad
  • Those who earn income over £100,000
  • Those who have sold an asset during the tax year e.g. a second home, or a rental property
  • Ministers of Religion


You must notify HMRC if you become chargeable to income tax or capital gains tax for the first time. Notify HMRC within 6 months of the tax year end i.e by 5 october 2020 if you become chargeble to income tax/capital gains tax in the year 2019/2020.


If you are unsure whether you need to complete a tax return, please contact us for advice.


Self Assessment


If you need to complete a tax return, you will need to be registered with HMRC for self assessment. You will then receive a Unique Taxpayer Reference and must submit online by 31st January. For example for the tax year 6 April 2019 to 5 April 2020, online return must be submitted by 31 January 2021.


Penalties for late tax returns


HMRC have introduced new penalties.  If you miss the 31st January deadline by a day, you will receive an automatic £100 fixed penalty, even if you have no tax to pay or have paid the tax you owe. If you are over three months late, you will also start to incur penalties of £10 for each additional day that you are overdue up to a maximum of £900.

 If you are six months late, you also incur an additional minimum £300 penalty. bringing the total penalties to £1,300.


Clayton Accountants can deal with HMRC on your behalf, taking the headache out of self assessment. We can ensure you are registered correctly with HMRC and get your returns submiited on time, with no penalties to pay.