Tax return (United Kingdom)
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In the United Kingdom, a tax return is a document that must be filed with the HM Revenue & Customs declaring liability for taxation. Different bodies must file different returns with respect to various forms of taxation. The three main returns currently in use are:
- SA100 for individuals paying Income Tax
- CT600 for companies paying Corporation Tax
- P35 for PAYE deductions by employers
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[edit] Income tax self-assessment
Most employees paying tax under the PAYE system are not required to file a tax return, because the PAYE system operates to withhold the correct amount of tax from their wages or salaries.
A tax return is required for
- the salaried employee, who claims exemptions, and others with income from which no tax is withheld at source (e.g. rental income)
- those who pay tax at the higher rate (40%, or 32.5% for dividend income)
- managing directors of companies to which has more than 35% shares
- employees and pensioners with more complex tax affairs
The form currently in use is the SA100 series, complete with additional sheets for particular sources of income. The process must be completed by 31 January following the end of the relevant tax year. Taxpayers have the choice of assessing the liability themselves, for which a number of working sheets are supplied by HMRC, or completing only the details required for assessment, in which case the return must be filed by 30 September.
[edit] Corporation tax self-assessment
A company must file a return, using form CT600, and assess its liability to tax, normally within 12 months of the end of its accounting year.
[edit] PAYE deductions
At the end of the tax year, after 6 April, employers operating PAYE schemes must report to the Revenue their employees, the total that has been paid to them, and the amounts of income tax and national insurance contributions (NICs) that have been deducted from those payments. This is done on form P35.
All UK organisations, even dormant companies, are legally obliged to prepare and file an annual return at Companies House. Failure to honour this obligation within a specific timeframe can lead to criminal prosecution. In the worst cases directors have been prosecuted and a company struck off the register. Comprehensive monitoring by HM Revenue and Customs mean many businesses choose to outsource annual Returns to specialists.
