Many people assume that if they have no tax to pay, they do not need to submit a Self Assessment tax return.
However, whether you need to file a tax return depends on your circumstances and whether you meet HMRC’s Self Assessment criteria, not simply on whether tax is ultimately due.
When might a tax return still be required?
For example, HMRC may expect you to complete a tax return if you:
- Are self-employed and your income exceeds your trading allowance.
- Are a partner in a partnership.
- Receive certain types of untaxed income.
- Have capital gains to report.
- Receive foreign income.
- Are liable to the High Income Child Benefit Charge.
This is not a complete list. If you are unsure, HMRC has an online tool that can help you check whether you need to submit a return.
What if you made a loss from self-employment?
Making a loss does not automatically mean that you do not need to file a tax return.
If you are self-employed, you will normally need to complete a return where your gross income before expenses exceeds your £1,000 trading allowance. Reporting a trading loss may also allow the loss to be recorded and, depending on your circumstances, used to reduce taxable income in the current or a future tax year.
What if HMRC has asked you to file?
If HMRC has written to you asking for a tax return, you must submit it by the deadline shown unless HMRC agrees that it is no longer required.
A late filing penalty can apply when a required tax return is submitted after the deadline. This is separate from any penalty or interest that may apply to tax paid late.
What if you no longer meet the criteria?
If HMRC has asked you to file but you believe you no longer need to complete a return, you should contact HMRC and explain your circumstances.
Unless HMRC confirms that the filing requirement has been cancelled, you should assume that the return is still required.
What if you have not declared income from an earlier year?
If you discover that income was not reported in an earlier tax year, it is important to address the position as soon as possible.
This could include previously unreported self-employment, rental income, foreign income or income omitted from an earlier return. The appropriate action will depend on the circumstances and may involve registering for Self Assessment, submitting an outstanding return or using an HMRC disclosure facility.
The key takeaway
Having no tax to pay does not automatically mean that you have no filing obligation.
If HMRC has asked you to complete a tax return, or you think you may meet the Self Assessment criteria, check your position rather than assuming that no tax means no return.