Need to register for Self Assessment? Top 5 myths – debunked | Newry News

Anyone who needs to complete a Self Assessment tax return for the first time to cover the 2023 to 2024 tax year, should tell HM Revenue and Customs (HMRC) by 5 October 2024.

There are plenty of myths about who needs to file a Self Assessment return before the 31 January 2025 deadline and HMRC today debunks some of the most common ones.

Myth 1: “HMRC hasn’t been in touch, so I don’t need to file a tax return.”

Reality: It’s the individual’s responsibility to determine if they need to complete a tax return for the 2023 to 2024 tax year.

There are many reasons why someone might need to register for Self Assessment and file a return, including if they:

    are newly self-employed and have earned a gross income of over £1,000 

    earned below £1,000 and wish to pay Class 2 National Insurance Contributions voluntarily to protect their entitlement to State Pension and certain benefits 

    are a new partner in a business partnership

    have received any untaxed income over £2,500

    receive Child Benefit payments and need to pay the High Income Child Benefit Charge because they or their partner earned more than £50,000

More information can be found on GOV.UK and anyone who is unsure if they need to file an assessment can use the free online tool on GOV.UK to check.

Once registered for Self Assessment, they will receive their Unique Taxpayer Reference, which they will need when completing their return and paying any tax that may be due.

Customers will have to reactivate their account if they have registered for Self Assessment previously but did not send a tax return last year.

Myth 2: “I have to pay the tax at the same time as filing my return.”

Reality: False. Even if someone files their return today, the deadline for customers to pay any tax owed for the 2023 to 2024 tax year is 31 January 2025.

Customers may also be able to set up a Budget Payment Plan to help spread the cost of their next Self Assessment tax bill, by making weekly or monthly direct debit payments towards it in advance.

Myth 3: “I don’t owe any tax, so I don’t need to file a return.”

Reality: Even if a customer doesn’t owe tax, they may still need to file a Self Assessment return to claim a tax refund, claim tax relief on business expenses, charitable donations, pension contributions, or to pay voluntary Class 2 National Insurance Contributions to protect their entitlement to certain benefits and the State Pension.

Myth 4: “HMRC will take me out of self-assessment if I no longer need to file a return.”

Reality: It is important customers tell us they’ve either stopped being self-employed or they don’t need to fill in a return, particularly if they have received a notice to file.

If they don’t, HMRC will keep writing to them to remind them to file their return and we may charge a penalty.

Customers may not need to complete a tax return if they have stopped renting out property, no longer need to pay the High Income Child Benefit Charge, or their income has dropped below the £150,000 threshold and have no other reason to complete a tax return.

If customers think they no longer need to complete a tax return for the 2023 to 2024 tax year, they should tell HMRC online as soon as their circumstances change.

Customers can watch HMRC’s YouTube videos on stopping Self Assessment to guide them through the process.

Myth 5: “HMRC has launched a crackdown on people selling their possessions online and now I’ll have to file a Self Assessment return and pay tax on the items I sold after clearing out the attic.”

Reality: Despite speculation online earlier this year, tax rules have not changed in this area.

If someone has sold old clothes, books, CDs and other personal items through online marketplaces, they do not need to file a Self Assessment and pay Income Tax on the sales.

HMRC’s guidance on selling online and paying taxes can be found on GOV.UK. 

Myrtle Lloyd, HMRC’s Director General for Customer Services, says, “We want to make sure you are clear about your tax responsibilities. These myth busters and our range of resources on GOV.UK can help if you are unsure if Self Assessment applies to you or think you no longer need to file a tax return. Just search ‘Self Assessment’ on GOV.UK to find out more.”

HMRC has a wide range of resources to help customers register for self-assessment, including video tutorials on YouTube and help and support guidance on GOV.UK.

HMRC urges customers to file their returns early to provide peace of mind and to also allow time to consider opportunities to spread the cost of their tax bill, claim refunds earlier and avoid costly errors caused by rushing.

Customers need to keep records to fill in their tax return correctly and they may be asked for documents if HMRC checks their return.

Penalties may be issued if records are not accurate, complete and readable.

Self-employed workers must also keep records of their business income, outgoings and make sure they’re registered with HMRC as self-employed. More information can be found on GOV.UK.

People should be cautious of potential scams and never share their HMRC login information with anyone, even a tax agent if they have one. HMRC’s scam advice can be found on GOV.UK.

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Posted by NewryTimes News on Oct 4 2024. Filed under Business, Community. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry