We are often asked to advise on the what should be disclosed in a personal tax return. We hope our blog helps.
Accidentally omitting information from your tax return can result in your tax and National Insurance bills being miscalculated, or you could wind up receiving the wrong level of benefits, such as child tax credits. Errors can even trigger an enquiry from the Revenue, who may levy financial penalties for filing an inaccurate return.
We have put together this list of data that should be included in your tax return depending on your circumstances.
- If you are working for your self as a sole trader or you are in a partnership, they either self-employed earnings or your share of partnership profits should be included.
- Bank interest should also be disclosed on your tax return, even though you’ve already paid the tax on it. Interest on ISAs is tax-free and does not need to be included in your tax return. If you have a joint savings account with someone else, such as your spouse, you just show half the interest (i.e. your share) on your tax return.
- Dividends, like bank interest, are received net of tax and if you’re a basic rate taxpayer, there is no additional tax to pay. However, dividends should still be disclosed on your tax return. As with bank interest, dividends on shares held in an ISA are tax-free and do not need to be included.
- If you’re an employee, you should include the gross pay and tax suffered per the P60 (end of year summary) your employer gives you. Also include the information on your P11D if you get one: this covers any benefits your employer pays on your behalf. Your employer might not give you the P11D till June or July. You can also claim for certain expenses incurred in the performance of your duties. For example, cleaning your uniform, professional or trade subscriptions and mileage. This can be claimed if your employer doesn’t pay the full mileage rate, which for using your own car is 45p per mile up to 10,000 miles and 25p for every additional mile.
- Rental income and expenses – you should also disclose rent you have received for the occasional letting of a second home. For example, letting a room or more in your own home. You may receive up to £4,250 per year tax-free if you let our furnished accommodation in your own home: this allowance does not apply to separate flats or second homes.
- One-off receipts of money or monies received that don’t fit neatly into any other section of the return should be included in the “other income” box on the tax return.
- If you’re a higher rate tax payer, disclosing the gift aid donations and pension contributions you’ve made during the year will (depending on the type of pension you have) decrease your tax bill.
- The tax return includes a white box to note any information or explanations which the Revenue might find useful to understand the figures on the return. It is a good idea to make use of this note if the figures on your tax return are quite different from the previous years or the industry average if you are self-employed. If the figures on the tax return are unusual and catch the Revenue’s eye, the information in the “white box note” may answer their curiosity and prevent an inquiry.
The above list is not intended to be exhaustive. It would be best to discuss your tax affairs with an accountant to make sure everything is included.