Notification of chargeability to income tax and capital gains tax

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Notification of chargeability to income tax and capital gains tax
  • Self Assessment regime
  • Taxpayers who complete a Tax Return every year
  • Taxpayers who have tax to pay but have not been issued with a Tax Return
  • Penalties for failure to notify involving offshore matters and offshore transfers
  • Offshore matters and offshore transfers failure to notify ― additional penalties on top of tax-geared penalties
  • Criminal offences failure to notify ― 6 April 2017 onwards
  • Enablers of offshore tax evasion or non-compliance ― 1 January 2017 onwards

Self Assessment regime

The majority of the taxpayers in the UK do not need to complete a Self Assessment Tax Return as they are primarily employees whose tax is deducted at source by their employers under the pay as you earn system (PAYE). Similarly, most taxpayers receiving investment income will not need to file a Tax Return if this income is within the savings nil rate band or the dividend nil rate band. See the Taxation of savings income and Taxation of dividend income guidance notes.

Whether the taxpayer needs to complete a Tax Return or not will depend on his circumstances. The following list of those whom HMRC suggests should submit Tax Returns is compiled by updating the archived HMRC guidance  together with the information available on the GOV.UK website :

  • the self-employed (either sole traders or those in partnership)
  • a company director (unless the taxpayer is a director of a non-profit organisation, for example a charity, and does not receive any payments or benefits). Note that HMRC announced  it had updated its guidance in December 2018, in order to make it clear that company directors do not need to file a Tax Return if all their income is taxed at source and they do not otherwise need to file a Return (eg to claim a relief)
  • a minister of religion (any faith)
  • a name or member of Lloyd’s
  • those receiving:
    • income from taxed savings and investments of £10,000 or more
    • income from untaxed savings and investments of £2,500 or more
    • income from property (before deducting allowable expenses) of £10,000 or more
    • income from property (after deducting allowable expenses) of £2,500 or more
    • annual trust or settlement income on which tax is still

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