In this short section we have a quick look at whether you need to complete a tax return if you are employed. For more detailed information on how self assessment works click here.

What is self-assessment (SA)?

Do I need to complete an SA return?

What is self-assessment (SA)?

• Self-assessment is not a new tax nor is it a tax at all. The idea of self-assessment is that you are responsible for completing a tax return if you need to, and for paying any tax chargeable for that tax year.

Do I need to complete a SA return?

Self-assessment does not affect everyone and you will normally only need to complete a form if you:

• Are working for yourself - you are self employed
• Are a company director (except not for profit organisations)
• Are a minister of religion (any faith or denomination)
• Are a partner in a business
• Are a 40% taxpayer although there are some exceptions to this
• Are a trustee or the executor of an estate

• Untaxed income e.g. interest that is not taxed before it is paid to you e.g. Most National Savings products or rents. If you are an employee and the income is less than £2,500 a year a tax return may not be necessary but if you receive other untaxed interest and the tax due on it cannot be collected via your PAYE coding notice you will need a tax return.



• If you receive regular annual income from a trust or settlement or income from the estate of a deceased person and further tax is due on the income



• Taxable foreign income whether or not you are resident in the UK and including non resident landlords



• Savings and investment income of £10,000 or more before tax



• Annual income of £100,000 or more before tax



• Tax due at the end of the year that cannot be collected via your PAYE coding notice for that year



• Untaxed income of £2,500 or more but if you are a pensioner you may be able to pay your tax through your PAYE Coding Notice



• Claims for expenses of £2,500 or more



• Higher age allowance as you are 65 or over and your allowance is reduced because of the level of your income - for 2010/11 your income will be over £22,900



• Capital Gains where:
  • You have given away or sold assets worth £40,400 or more for 2010/11;
  • Or you have a capital loss but your gains net of any losses are more than the annual exemption for 2010/11 of £10,100
  • Or if you have no losses to claim but your gains are more than the annual exemption for 2010/11 of £10,100
  • Or you need to make any other Capital Gains Tax claim or election for the year
  
  
• HMRC may also want you to complete a return for other reasons or you may choose to complete the form.

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