If you’ve been freelancing or working for yourself for some time, you’ll be well aware that you must submit your Self Assessment tax return each year. But sometimes, circumstances change, and you won’t need to complete a tax return anymore.
Maybe you didn’t earn enough on the side to have to declare the money, or maybe you’ve become a full-time employee and are closing your own business indefinitely. Either way, you have to let HMRC know!
In today’s blog post, we’ll break down the simple steps to inform HMRC that you no longer need to count your tax return:
1. Check whether you’re required to file a tax return.
First things first, check that you definitely don’t need to submit a tax return. The last thing you want to do is get in trouble for not submitting the forms or paying the tax you owe. HMRC has specific criteria to determine if you can stop counting your Self Assessment tax return. If your income has fallen below the filing threshold, and you don’t have additional sources of income that need reporting, you might be eligible. You’ll need to count a tax return if, in the last tax year (6th April – 5th April), you:
- Were self-employed as a ‘sole trader’ and counted more than £1,000 (before taking off anything you can claim tax relief on).Were a partner in a business partnership.Had a total taxable income of more than £100,000.Had to pay the High Income Child Benefit Charge.
- COVID-19 grant or support payments.Money from renting out a property.Commission and tips.Income from savings, investments, and dividends.Foreign income.
2. Let HMRC know as early as possible!
Make sure you get in there early, or as soon as you realize that you don’t need to complete a tax return this year. You may have to pay a penalty if HMRC doesn’t receive and agree with your submission before the Self Assessment deadline of 31st January.
3. Make sure you’re still fulfilling your tax duties.
Even though you no longer have a duty to complete or send HMRC a tax return, ensure that you’re still meeting your other tax obligations. This includes reporting any taxable income from rental properties, dividends, or other sources separately if they exceed the threshold.
Are there any other ways to let HMRC know you’re no longer required to complete a tax return?
Yes. You can also get in touch with HMRC using their online assistant, or by phone or by post (if you don’t fancy doing it the digital way).
What if you only need to stop filing a tax return for one year?
If you want to skip a year without closing your business for good, you can use the same online form as above. And if you want to speak to a real person at HMRC about your situation, keep in mind that you can always call HMRC up and explain things over the phone.
If you feel uncertain or have a complex financial situation, we recommend seeking advice from an accountant or professional tax advisor. They can provide personalized guidance based on your circumstances and help you navigate any complexities in the tax system.
You’re all set!
All in all, letting HMRC know they won’t be receiving a tax return from you this year is a fairly straightforward process. The main things to remember are to use the correct online form, to report your details accurately, and to let HMRC know as early as possible that you’re not required to submit one.
If you have any questions, don’t hesitate to get in touch with our team of tax experts here at Count. We’d be more than happy to help!