The countdown is on for millions of people here in UK who need to file their tax returns ahead of the 31 January deadline.
Could you be one of the millions of people that could be caught out this year, as new rules on selling online mean you might not even realize you have to file a self-assessment return. To avoid any extra stress ahead of 31 January, we at Exsus can and will explain who needs to file a tax return – and who doesn’t – speak to us today!
Who needs to file a tax return?
- A self-assessment tax return needs to be submitted by anybody who runs a small business or receives income from another source which hasn’t been taxed.
- This includes those self-employed as a sole trader who earned more than £1,000, partners in a partnership, and those with a total taxable income of more than £100,000.
- This month’s deadline is for the tax year which started on 6 April 2022 and ended on 5 April 2023.
- Income from overseas, from savings, investments and tips or commission may also be subject to self-assessment, as well as anyone earning more than £50,000 whilst receiving child benefit.
- If you receive a salary from your employer, and have not received money from any other sources, you don’t need to worry about self-assessment. Tax has already been deducted from your wages and paid to HMRC via PAYE.
- But if you have a side income or rent out a property on top of your full-time job, will need to file a tax return.
However, there are some exceptions to this.
- The trading allowance means that £1,000 of self-employed income can be earned in a tax year before HMRC needs to be notified, or tax paid on it.
- If you don’t file on time, you face an automatic £100 fine. This increases to a £10 daily charge after three months and a further 5 per cent of any tax owed, or £300, whichever is greater.
- Online Sales
- Ø HMRC has been cracking down on online traders who use platforms like eBay and Vinted and have failed to declare their income / sales.
- Ø Many taxpayers are unclear if this income should be declared, especially as most sellers will only be selling a few items, rather than becoming a professional seller. Speak to us here in Exsus, and we will be able to advise you and give you support and peace of mind.
- Ø However, the £1,000 trading allowance means most taxpayers will not face a large tax bill.
- Ø From 1 January 2024, digital platforms like Airbnb, Uber and Etsy will be responsible for collecting information about how much their users are earning from selling goods and services. Also, any incomes, such as taxi drivers, food deliverers, freelancers, short-term accommodation owners and online marketplace sellers are all subject to the new rules.
- Ø UK-based sellers who trade overseas can be affected by the new rules. The usual rules around submitting a self-assessment still apply.
And lastly… don’t leave it until the last minute!
With the HMRC helpline only available to vulnerable customers, you will need to put aside time to find out information you might not have.
‘Do not delay completing your tax return. It’s all in the preparation – to avoid last minute rushes, ensure all expenses are accounted for accurately and working with us at Exsus , we will make sure this happens for you.
If you’re stuck for New Year’s resolutions, then keeping your financial records organized throughout the year can help to simplify the process and reduce errors.
Contact us today and let us at Exsus support you and your business.