Registering for Self Assessment

Question.

I have received dividend Income in 2016-17 for shares that I had bought and the voucher advises this is information needed for completing your Tax Return. I have never completed a tax return before, why would I need to complete a tax return now and how would I register with HMRC to complete a tax return?

 

Answer.

 

There are a number of reasons why you would need to register for self-assessment to complete a tax return. If you became a company director, start to get income from land or property in the UK, have received taxable foreign income of £300 or more, sell shares, property or other assets liable to Capital Gains Tax, have an annual income of £100,000, either you or your partner have income over £50,000 and have claimed child benefit or you get income which cannot be collected through your PAYE code.

 

In addition to the above criteria, the rules on dividend income have also changed from the 6th April 2016. Previously basic rate tax payers would have had no tax liability for dividend income as they would have been covered by the 10 % dividend tax credit. This tax credit was abolished in 2016-17 and has been replaced by a Nil Rate dividend allowance of £5,000. If your dividend income is more than £5001 you will have to complete a self-assessment tax return.

 

To register for self-assessment you need to complete an SA1 form, stating the reason why you need to register and send to HMRC. You will need to submit the form to HMRC by 5th October 2017 or you could receive a late registration penalty. You will then be issued with a Unique Tax Reference (UTR) and a notice to file a tax return.

 

You will have to 31 October 2017 to file a paper return for the 2016/17 tax year or 31 January 2018 to file an online return. Any outstanding tax liability for 2016-17 and a payment on account for 2017/18 if applicable must also be paid by 31 January 2018.

 

The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

 

Get in touch with Rosemary Loughran via email r.loughran@pkffpm.com