There are a number of taxpayers who fulfil the criteria to complete a self assessment tax return. There are many reasons; it may because they are self employed, either as a sole trader or a partner in a partnership, have untaxed income above a certain level, or they are a director of a company. If any of the self assessment criteria applies to you, it is crucial that you inform HM Revenue & Customs immediately. You will be set up in self assessment and a Unique Taxpayer Reference will be sent out to you. Each year you will have to complete a self assessment tax return – form SA100 – which is the main tax return. If you need to declare any other income details which aren’t asked for on the main tax return, you will complete a form SA101 with additional information. Certain types of income which are more common will have their own supplementary pages to be completed, like foreign income or employment.
The SA101 supplementary page is used to supply details of income which is less common, any deductions or tax reliefs, tax losses information, any changes to pensions and to report participation in tax avoidance schemes. Other types of income includes interest received from Government stocks or loan notes, bonds or securities which have been issued by companies, local authorities or other bodies in the UK. You can elect to receive interest from Government stocks either taxed or untaxed. If you receive the interest untaxed, it must be entered on the form SA101. Gains from life insurance must also be declared on form SA101. If you receive a ‘chargeable event’ certificate from an insurance company or a friendly society, you must enter the details on the form. However, if the annuity or policy is jointly owned, only enter your share of the gain.
If you elect to receive shares rather than a cash dividend from a company, this is called a stock dividend and must be reported on form SA101. The dividend statement which is provided by the company will detail the cash equivalent of the shares or the amount in cash. This is the figure you enter on form SA101. If you have a business which has ceased but have receipts after the date of cessation, they will be taxed as income from an earlier year and should be entered in the box for the appropriate year. Details of any share schemes should also be entered on form SA101, along with employer related securities.
Lump sums received, or compensation like redundancy payments, should also be declared on this form. Some payments may be made by your employer when employment is terminated or when employment terms change. For redundancy payments, the amounts entered on the form will be split with amounts received below the £30,000 threshold in one box and amounts received above the threshold in another box.
There are many other types of income which should be entered on the form SA101, including Seafarers’ Earnings Deduction. The definition of a seafarer is ‘someone who performs their employment duties on a ship’. Foreign earnings which aren’t liable to tax in the UK should also be declared along with any tax you have paid on employment income while overseas; you may want to claim tax credit relief on this tax paid.
Certain tax reliefs, expenses and claims for maintenance will also be made using the form SA101. Claims for age related married couples allowance will also be made using form SA101. To ensure that the correct supplementary pages are completed each year, seek advice from HMRC or a tax professional.
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