FAQs - Self Assessment

1. Do I have to pay tax on maintenance payments received from my husband under a Consent Order?
2. Do I need to show details of the income from my PEPs and TESSAs on my tax return?
3. Does the Inland Revenue have the power to obtain and use documents from a third party, without prior notice to the taxpayer being investigated?
4. I’ve been in full time employment since March last year and have just seen adverts about tax returns. Do I need to complete one?
5. If I decide to build a second house to sell, will I have to pay a percentage of tax? Is there a time scale on this?
6. If you need to fill in a tax return form, will this automatically be sent out to you?
7. Is it possible to amend my tax return after it has been submitted?
8. Our income derives from pensions, savings interest and a small bed and breakfast from our home. Do we still need to fill in a tax return?
9. Are there any benefits in getting my self-assessment tax return in early?
10. It’s past 30th September, and I haven’t filed my tax return - am I in trouble?

1. Maintenance of all kinds was made non-taxable since April 2000, so there's no need to declare it.

2. The income from your PEPs and TESSAs does not need to be shown on the return unless you closed your TESSA within five years from opening the account or if you withdrew more than £180 from cash held within your PEP.

3. The Revenue can seek permission from the Commissioners to issue a Section 20 Notice. This can be used to obtain 3rd party info but they would only normally use these powers in exceptional circumstances.

4. You will only need to complete a Tax Return in three circumstances:

1. if you are liable to tax at the higher rate
2. if you have any untaxed income, or
3. if you are in receipt of investment income and your total income from all sources exceeds the basic rate tax band.

If in doubt, contact the Tax Office shown on your form P60.

5. Yes. Tax will be due on the profit over your building costs.

Generally, the tax will be due for the tax year ended 5th April in which the sale is made, and the tax will be payable on the 31st January after that.

There may be variations on these dates, depending on how the house-building business is set up (self-employed, Ltd Company etc) but your accountant will give you the exact relevant dates.

6. Normally if you are issued with a tax return for one year, you will be issued with another return the following year - unless you are advised that you will not be issued with one in the future. This would happen if you fell outside of the self-assessment regime.

However, if you have not prepared a tax return before and you feel you should, then you need to contact your local tax office to request a self-assessment tax return form.

7. Yes it is. You have one year from the filing date of 31st January in which to make any amendments to the return. However, if additional tax becomes payable because of the amendment, you will be charged interest on the underpayment of tax.

8. If you have been sent a self-assessment tax return then I'm afraid you must complete it and send it in. You have almost certainly received it because you have bed & breakfast income to declare; your other income probably all being taxed at source.

9. Yes. They are as follows:
• You know exactly what tax to pay and so won't make under or overpayments;
• If you are employed, tax liabilities of up to £2,000 can be collected via your tax code;
• You will get any money owed to you repaid quickly;
• No last minute panics chasing for information; and
• You won't miss tax planning opportunities when planning with foresight.

10. Only if you wanted the Tax Office to calculate your tax for you, or you had a small (up to £2,000) liability for 2005/06 which you wanted the Revenue to collect through your 2007/08 PAYE code.

The rule is that you have until 31 January 2007 to file your 2006 Tax Return - reporting income and gains for the year ended 5 April 2006. But if you leave it until then, you will have to work your tax liability out for yourself and you lose the chance to have small amounts of tax due collected through your PAYE code.

If your Tax Return is filed late, you will be liable to a penalty of £100, or the tax due, if less. There is a second penalty, again equal to the lesser of the tax due and £100 if your Tax Return is not filed by 31 July 2006.

There are, though, some circumstances in which a late Tax Return will not result in a penalty. By law you must ask for a Tax Return by 5 October after the end of the tax year if you know you have tax to pay. In such cases you have three months from the date the Tax Return is issued to complete and file it.