HMRC have issued a press release debunking some common myths about whether or not someone needs to register to complete a self-assessment tax return.

Given that we hear some of these on a regular basis, it seemed sensible to share some of the myths and the realities HMRC highlighted:

I don’t need to file a Tax Return because HMRC hasn’t been in touch.

Myth: I don’t need to file a return because HMRC hasn’t been in touch.

Under ‘Self-Assessment’ it’s each taxpayer’s responsibility to determine whether or not they need to complete a Tax Return.

You may need to register and complete a tax return if you:

• have started to be self-employed and earned gross income of more than £1,000.
• earned below £1,000 but want to pay voluntary Class 2 National Insurance contributions to protect your pension and benefit entitlements.
• have become a new partner in a partnership.
• have received untaxed income above £2,500.
• need to pay the High Income Child Benefit Charge because you receive Child Benefit and you or your partner earned more than £50,000.

(NB: This is NOT an exhaustive list!)

Our verdict – Myth!

Tax has to be paid when the Return is filed.

The deadline for paying tax for the 2023-24 tax year is 31st January 2025. Tax can be paid any time before this date, it does not need to be paid at the same time the Return is filed. 

Our verdict – Myth!

I don’t need to file a Return because I don’t owe any tax.

Tax Returns need to be completed to claim tax refunds and to claim tax relief on business expenses, charitable donations, and pension contributions. 

A Return also needs to be completed to be able to pay voluntary Class 2 National Insurance Contributions if you want to protect your pension and benefit entitlements.

Our verdict – Myth!

HMRC won’t expect a Return from me if I don’t need to file one.

Taxpayers need to tell HMRC if they no longer need to file a Tax Return having sone so in the past, perhaps because they’ve stopped being self-employed or stopped renting out a property. This is particularly important if HMRC have sent you a Notice to file a Tax Return; they will expect one regardless of your changed circumstances and charge a penalty if they don’t receive it.

If you think you don’t need to complete a Return it’s best to tell HMRC as soon as your circumstances change.

I have to file a Tax Return and pay tax on things I sold after decluttering.

Although there has been a lot of speculation on this once this year, the tax rules are that selling old clothes, books, CDs and other personal items through online marketplaces do not trigger a requirement to file a return or pay income tax on the sales.

Our verdict – Myth!

Myth: My circumstances have changed but HMRC will want me to continue to submit a Tax Return every year.

My circumstances have changed but I’ll still need to submit a Tax Return every year.

In recent years we’ve seen more individuals being removed from the Self Assessment regime if they no longer need to declare additional sources of income. If HMRC don’t pick up the fact that you should be removed from your last Return, we can ask them to remove you from the Regime for future years, unless they issue a Notice, as outlined above.

This can be a drawback if your circumstances change again once you’ve been removed though, so do be careful! You’ll need to check each year that you are still safe not to submit a Return.

Our verdict – Myth!

This isn’t an exhaustive list of the many myths we hear around Self Assessment.

If you’re unsure whether you need to file a Tax Return for the year ended 5^th April 2024, please get in touch with us as soon as possible. We’ll talk through your circumstances and let you know whether you should submit to HMRC before the 31st January 2025.