Employed individuals pay income tax every month automatically via PAYE system (“Pay As You Earn”) and no tax return to HMRC is required if the employment income is the only source of income. However, there are instances when filing a Self-Assessment Tax Return is required by HMRC:
- Earning more than £100,000 from PAYE
- Receive Self-Employment income or are in a partnership
- Limited Company Director
- Receive rental income (UK or overseas)
- Receive income from overseas
- Household receives Child benefit and you have income in excess of £50,000
If any of the above applies, HMRC requires the tax payers to register for Self-Assessment. There are also situations when employees are not required to submit a Self-Assessment Tax Return but can do so in order to claim tax back from HMRC, for example for example paying for employment-related expenses not being reimbursd by the employer.