Not sure if you need to file a tax return?  HMRC has recently outlined the most common misconceptions about who needs to file a self-assessment return before the 31 January 2025 deadline and clarifies some of the myths and confusion surrounding self-assessment.

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

Reality: It is your responsibility to determine if you need to complete a tax return for the 2023 to 2024 tax year. There are many reasons why you might need to register for self-assessment and file a return, including if you:

• are newly self-employed and have earned gross income over £1,000; 
• earned below £1,000 and wish to pay Class 2 National Insurance Contributions voluntarily to protect your entitlement to State Pension and certain benefits; 
• are a new partner in a business partnership; 
• have received any untaxed income over £2,500; or 
• receive Child Benefit payments and need to pay the High Income Child Benefit Charge because you or your partner earned more than £50,000 (this limit increases to £60,000 for 2024-25). 

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

Reality: This is not true. Even if you file your return today, the deadline to pay any tax due for the 2023-24 tax year is 31 January 2025.

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

Reality: Even if you do not owe tax, you 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 your 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 that you tell HMRC if you have either stopped being self-employed or you don’t need to fill in a return, particularly if you have received a notice from them to file a return. If you do not let them know, they will keep writing to you to remind you to file your return and they may charge a penalty.

Taxpayers 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.

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

Reality: It is important to note that the rules have not changed in this area. If you have sold old clothes, books, CDs and other personal items through online marketplaces, you do not need to file a self-assessment return and pay Income Tax on the sales. 

If you have any questions regarding self-assessment, please get in touch.