Rules for self-assessment lindabea

#1
2. Who must send a tax return

The tax year is from 6 April to 5 April the following year.



YouÂ’ll need to send a tax return if, in the last tax year:



you got £2,500 or more in untaxed income, for example from renting out a property or savings and investments - contact the helpline if it was less than £2,500



your savings or investment income was £10,000 or more before tax



https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return



I copied the above statements from the GOV website about who should fill in a self assessment. (link inc). Can someone pls help as I'm finding the 2 statements somewhat contradictory. The first one refers if your savings income is more than £2500, yet the second one states you only need to complete a form if your savings income is more than £10000.



Baffled? - I certainly am!!

#2
The first one talks about over £2.5k "untaxed" income. If you received a decent amount of income and have received it without paying tax, they need to know what it was and how you got it and what the tax might need to be. It might be that it's just £1k of bank interest and £1.6k of dividend income, both of which fit inside your personal savings allowance and personal dividend allowance respectively, but as the total is a decent sized chunk of money that's never been taxed, they want to know.



The second one talks about you getting over £10k savings and investment income whether it was taxed or not. For example you might have got £1.4k dividend income which fits inside your dividend allowance and £1k of bank interest which fits inside your personal savings allowance and be under the limit of £2.5k for untaxed income which was described above - and so not be planning to do a return.



However if you also got £4k of interest distributions from your bond funds and £4k of property income distributions from some property funds within your investment portfolio, all with 20% tax withheld at source, then you still might not have any further tax to pay but the total amount of income you received which hasn't gone anywhere near the PAYE system, is over £10k. Such significant amounts of saving and investment and business income should probably be notified properly to HMRC and assessed in the context of all your earnings for the year - to see whether the tax you paid on this income, and any employment or pension income, should really be being taxed at (say) 20%, or perhaps 0% or 40% instead.

#3



2. Who must send a tax return

The tax year is from 6 April to 5 April the following year.



YouÂ’ll need to send a tax return if, in the last tax year:



you got £2,500 or more in untaxed income, for example from renting out a property or savings and investments - contact the helpline if it was less than £2,500



your savings or investment income was £10,000 or more before tax



https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return



I copied the above statements from the GOV website about who should fill in a self assessment. (link inc). Can someone pls help as I'm finding the 2 statements somewhat contradictory. The first one refers if your savings income is more than £2500, yet the second one states you only need to complete a form if your savings income is more than £10000.



Baffled? - I certainly am!!
Originally posted by lindabea


I think you're over thinking it. Which applies to you?





Item 1 is untaxed income, item 2 is any savings/investment income.





If you have over £2500 untaxed income you need to complete. If you have over £10k savings/investment income regardless of tax status you need to complete.

If you have £9000 of savings income that is already taxed you don't need to complete one.

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