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According to HM Revenue & Customs (HMRC), there are thousands of taxpayers who are completing self-assessment forms each year when they are not required to do so.

As more than one million people still had not completed and filed their online tax return on 30th January this year, HMRC has said that those who are due to pay less than £3,000 in tax may not need to complete a tax return. As more and more taxpayers fall into the higher rate tax bracket, HMRC expected a rise in self-assessment tax returns. However, the organisation also said that those who only owe a small amount of tax may not have been required to complete a form and the amount could be included in their tax code to be deducted each pay period during 2015-16.

HMRC has been accused of wasting people’s time by not making it clear about the best ways to pay tax owed. According to the tax practice director at The Private Office, Stuart Phillips:

“It is a great shame that in this country we are incredibly honest when it comes to paying our taxes, but HMRC doesn’t seem to be able to tell people the easiest way to do so.”

A spokesperson from HMRC said that those whose tax affairs are ‘simple’, like a freelance worker, may be able to have tax up to £3,000 collected through PAYE. However, the spokesperson also said that they would be advised by the telephone helpline that they would only be told not to complete a self-assessment tax return if their tax bill was under £2,500. It was confirmed by the spokesperson that only those with complex tax affairs would need to complete a tax return.

Self-assessment criteria

If you are a director of a company or self-employed you will need to complete a self-assessment tax return. If you are a partner in a business or you have any other income which isn’t taxed at source, you will also be required to complete a tax return.

Anyone who receives rental income, work expenses or foreign income that is more than £2,500 will be required to contact HMRC and ask for a self-assessment tax return. If your income is more than £50,000 and you receive child benefit, you will be asked to complete and submit a tax return.

There are various other scenarios in which you may be required to undertake this process, but if you are unsure, contact our team here at The Accountancy Partnership.

About The Author

Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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