If HMRC have issued a notice requiring you to file a tax return for 2017/18, you need read no further.
If HMRC haven’t required you to file a tax return for 2017/18 but you are chargeable to Income Tax or Capital Gains Tax for the year, you must “notify chargeability” (i.e. tell HMRC that you are chargeable) by tomorrow 5 October, unless you are exempt from doing so.
Very broadly, you are exempt if all the income you receive is taxed under PAYE (or taken into account in arriving at your PAYE code) or otherwise taxed at source. But there are two situations in particular that may trip you up.
The first is where you are liable to the “high income child benefit charge”. This has been an issue for some years – for more on this, see our earlier article.
The second results from the change to the way dividends are taxed, introduced in April 2016. The upshot is that basic rate taxpayers whose tax liability was previously fully covered by a dividend tax credit will generally now have tax to pay if their dividend income exceeds £5,000; and are therefore not exempted from the obligation to notify chargeability.
For more information, please get in touch with your usual BKL contact or use our enquiry form.