Do I still need a tax return?

There is a requirement to notify the tax office by 5th October following any tax year where you owe further tax in addition to any tax that has already been deducted at source. As you have made a small profit from your rental income activities then you need to notify the HMRC. This gives them enough time establish if a tax return is required and to issue you with one to complete.

However, HM Revenue & Customs are trying to reduce the burden of Self Assessment on taxpayers who have straightforward affairs and have identified some areas where a tax return will still not required.

If your income from rents is less than £2,500 for the year and your other income is from employment where tax is deducted at source, you can just contact the tax office and they should be able to settle your additional tax liability through an adjustment in your PAYE code, and collect the underpaid tax through deductions in your wages each month. This will avoid the onerous task of completing a tax return to show this small amount of income.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.