• 3 reasons why you might need to file a tax return before January 31st - even if you’re a full-time employee Jan 27, 2020
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    Ah January, what a miserable month. Christmas is over, everyone’s off the booze and eating vegan food. We’re all broke and to top it all off you might find yourself needing to file a tax return before the month is over. In fact, there are around 11 million self-assessment tax returns that are expected to be submitted before midnight on January 31st.

    But many will miss the deadline, not because of laziness or apathy or just trying to downright swindle the government - no, it’s because a lot of people don’t realise that they need to fill in a tax return in the first place; especially if they are full time employees who receive a monthly wage. Scared yet? Good. Let’s look at three of the unexpected ways in which you may fall into this category.

    1. Side jobs - In the current economic climate every single one of us is out to make a bit more moolah. Whether this is a little online cross-stitch shop you run, babysitting or writing really funny and interesting blogs - the opportunities are endless and people are cashing in. However, (and not a lot of people realise this), if you're cashing in then so must HMRC. You don’t have to pay any extra tax if your hustle is earning less than £1,000 a year, but if it goes above that then I’m afraid you need to cut a slice of that cake for the tax man.

    2. You make money overseas - Just because you’re making money outside of the UK does not mean it is exempt from UK tax, so if you are earning money this way then chances are you will need to submit a tax return to HMRC. You could be earning money in a number of ways: a freelancing job in a company based abroad, an overseas pension or any foreign-based savings or investments.

      People think “out of sight out of mind” but this is not the case. However, like your side job, you can earn up to £2,000 a year in dividends income (whether it’s UK-based or not) so unless the income is tax-free or tax has already been collected via an adjustment to your PAYE code then a tax return will be required.

    3. You rent space in your home - So this applies not only to a space in your home but your whole home too, should you decide to rent it out. Now hold up, wait a second - this is YOUR house that YOU paid for, why should the tax man get anything? Well, it’s because, as unfair as this may seem, it’s still classed as income. The Government already has a “Rent A Room Scheme” that lets you earn up to £7,500 tax free per year from renting furnished spaces in your home, so they’re not being complete witches about it. This threshold is then halved if you share the income with someone else. So regardless of whether you consider yourself a landlord or someone trying to earn an extra few quid, if you earn over £7,500 then you have to submit a tax return.
    So there you have it! Some of you might be sitting there silently screaming inside with a bead of cold sweat making its way down your spine but fear not, you have until the end of the month to file a tax return should any of the above apply to you. It is very simple, just contact HMRC, your payroll department or accountant to see if you need to submit a tax return. If you do, then you need to apply for a Unique Taxpayers Reference (UTR) number through the www.gov.uk site. Once you have this you need to apply for self-assessment and HMRC will send you a unique code in the post within 7 days that you use to complete your self-assessment online. Enough time to get all your bits in order!

    Phew, now I’m sweating! Good luck and godspeed!


    Written by Aoibheann Byrne - BrightPay Payroll Software
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