Should I be filing a tax return?

When I was growing up, I remember my mum being anxious as I was beginning to earn some money from my singing that I made sure that I was doing all that I should be in the eyes of HMRC. The problem was we weren’t entirely sure what the rules were at the time and I want to clear this up for anyone who is unsure.

You may have heard things like,

‘You don’t need to file tax returns until you’ve left college’

Or

‘If your trading profit is under the tax free personal allowance for income tax (£12,570 in 22/23) then there’s no need to do anything’

Unfortunately, these aren’t correct! HMRC state that,

You must file a tax return if you are earning over £1,000 in a tax year (6th April to 5th April) from a self-employed business.

Note that this refers to income before any allowable deductions, rather than profit.

There are many other reasons why you may need to file a tax return, but for the simplicity of this blog I will stick to self-employed income.

Whether you have any tax payable or not will depend on whether your total taxable income, having taken account of other sources outside of your self-employment, is over the relevant thresholds for national insurance and income tax.

If this comes as a bit of a surprise to you, and you want some help in working out what you need to do, then please do get in touch.