The 2021/22 tax year ended on April 5 2022 and taxpayers within the Self-Assessment system will have recently received a 'notice to file’ letter from HMRC.
Income Tax and National Insurance is usually deducted automatically from wages, pensions and savings. However, individuals with untaxed income or capital disposals must complete a tax return. Self-Assessment is a system used by HMRC to collect Income Tax, Capital Gains Tax and Classes 2 and 4 National Insurance Contributions and are also used to allow taxpayers to claim additional tax relief, i.e. relief on personal pension contributions or tax effective investments.
Criteria for Self-Assessment:
- You are self-employed as a ‘sole trader’ and have gross earnings exceed £1,000;
- You are a partner in a business partnership;
- You or your partner received child benefit and either of you had an annual income of more than £50,000;
- You receive foreign income, rental income or annual income from a trust/settlement;
- Your total annual income exceeds £100,000;
- You have Capital Gains exceeding £12,300; or
- You receive any other untaxed income.
How do I register for a 2021/22 tax return?
Individuals not already within the self-assessment system but who require completing a tax return for the 2021/22 tax year must register with HMRC by October 5 2022. Where registration is not completed by October 5 2022 HMRC may issue a ‘Failure to notify’ penalty.
When do I need to file my tax return?
The submission deadline for the 2021/22 tax returns is October 31 2022 for a paper submission or January 31 2023 where the return is submitted electronically, but it can be completed any time after April 6 2022. We would always recommend early completion to give pre warning of any tax liability due ahead of the payment date of January 31 2023 and to secure early closure of HMRC’s enquiry window.
Individuals who have a tax liability for the 2021/22 tax year of £3,000 or less can opt to have the liability collected via their PAYE tax coding notice for the 2023/24 tax year, to benefit from this the tax return must be submitted on or before December 30 2022.
I no longer meet criteria for Self-Assessment but HMRC have issued a notice to file
If you have received a notice to file, and you do not meet the above criteria and you do not owe any tax liability, a request can be made for the tax return to be withdrawn. If HMRC agrees that you no longer require to file a tax return, then they will formally write to you confirming their agreement to remove you from the Self-Assessment system.
Summary of Key Dates and Deadlines
Registration for Self Assessment for 2021/22
By October 5 2022
Submission of paper tax return
By October 31 2022
Tax to be collected via tax code submission online
By December 30 2022
Submission of online tax return
By January 31 2023
Balancing tax payment for 2021/22
By January 31 2023
If you would like any further information on or would like any advice or help with completing your Self-Assessment Tax Return, then please get in touch with Carol Edwards or your usual AAB contact.
Find out more about our Private Client Tax team here.