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HMRC internal manual

Self Assessment: the legal framework

HM Revenue & Customs
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Self Assessment Tax Returns: Personal Tax Returns

The tax return is required to establish a taxpayer’s net tax liability on total income and any chargeable gains

Section 8(1), (1AA) and (5)

A notice requiring a tax return (a ‘notice to file’) is issued to the taxpayer by ‘an officer of the Board’. Depending on what the taxpayer may need, from reference to their past filing history, some taxpayers are sent a paper tax return, which contains the notice to file. Every notice to file requires a return of information. This information is required for ‘establishing the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment’.

A single tax return covers the taxpayer’s ‘total income’. This means that a tax return is required for all sources of taxable income. The amounts returned should be the net amounts of any such income, after taking into account:

  • any relief or allowance for which a claim is made in the return
  • any income tax deducted at source (or treated as deducted at source, or treated as paid).

In other words under ITSA a return is required to determine the net income and capital gains tax due for any tax year.

There are fixed time limits for filing a tax return

Section 8(1)(a) (1D) and (1E)

The time limits for filing a return, complete with a self assessment, are fixed as either:

  • 31 October following the tax year to which the return relates if a paper return is filed
  • 31 January following the tax year to which the return relates if the return is filed electronically.

If the tax return is issued after 31 July following the tax year to which the tax return relates the filing date is three months from the date of issue or 31 January whichever is later if the return is filed electronically.

Earlier filing dates apply where an HMRC calculation is required (see If the taxpayer files their tax return early enough HMRC will assist in the calculation of the tax due in SALF204). These time limits provide a realistic time scale for completion of the tax return form. It should also be noted that tax returns can be filed early, even though payment will not be required until the statutory due date.

Time at which a tax return is filed (‘delivered’)

‘Deliver to the officer’ (Section 8(1)(a)) is generally taken to mean that the tax return is received at an HMRC office ‘on or before’ the relevant day. HMRC accept that delivery can be made up to midnight and to recognise this will accept as ‘on time’ tax returns found in the office post box at the start of the next day. HMRC will normally accept a tax return as having been filed on time if it is clear that the taxpayer took steps to ensure that would be the case, although for some reason it was delayed thereafter (for example, by a Post Office delay).

There are automatic penalties for failure to file a tax return on time

Section 93

If the time limits for the filing of tax returns are not met, fixed penalties will automatically arise. In some cases additional daily or tax geared penalties may also be sought (see SALF208).

HMRC may make a determination of the tax due

Section 28C

Where a taxpayer fails to file a tax return HMRC can make a determination estimating the tax due (see SALF209).

The fixed filing dates for tax returns also define the due dates for the payment of tax

In most cases the 31 January filing date for tax returns filed electronically is also the due date for the balance of any tax payable for the period covered by the return (see SALF300 for details).

In most cases, interest is payable on any unpaid tax from the due date for payment. In addition to any interest there is an automatic tax-geared surcharge for failure to pay the tax due on time, which will also attract interest if paid late. However, this surcharge does not come into effect until 28 days after the due date for final payment (see SALF300 for details).

Accounts, statements and documents may be required with the tax return

Sections 8(1)(b) and 12B

The taxpayer may be asked to provide ‘accounts, statements or documents’ relating to the information in the tax return with the return when it is filed.

Taxpayers are required to enter the relevant accounts information in a special section in the tax return. The inclusion of this ‘standardised accounts information’ in the tax return means that separate accounts are not required by HMRC, unless the business is particularly large or complex. (The accounts should be retained, as they may be required in an enquiry into the accuracy of the tax return.)

The reference to ‘documents’ is not a reference to business books and records, or to similar documents. It is simply a reference to any documentary evidence that may be required with the tax return. Any documents required by the notice to file are clearly requested in the body of the paper tax return or in the on-screen messages in the internet service. Documents can be ‘attached’ to tax returns filed electronically.

There is a statutory requirement to keep records and HMRC may ask to see these records if they open an enquiry into the accuracy of the tax return. For people in business any records must be kept for five years from 31 January following the tax year to which they relate, or, if later, until the completion of a formal enquiry into the accuracy of the tax return.

For people not in business, the statements and documents on which the tax return is based must be kept for one year from 31 January following the tax year or, if the tax return is filed late, for approximately one year from the date on which the return is filed, but in any case in which an enquiry is made into the accuracy of the tax return the records must be kept at least until that enquiry is complete. (See SALF211 for details of the record keeping obligation.)

A partner’s share of any partnership income must be included in his or her own tax return

Section 8(1B) and 8(1C)

Under the rules of SA, partners are individually responsible for the tax due on their share of any partnership profit, whether the profit from a business carried on by the partnership or the income on investments held by the partnership. So the share(s) of partnership profit must be included in each partner’s personal tax return.

Similarly partners are required to include their share of partnership losses, credits, or charges, in their own tax return.

Although partners are individually responsible for the tax due on their share of partnership profits, all matters relating to the calculation of those profits, and to the allocation of profits between partners, will be dealt with through a partnership tax return (see Chapter 5). So as far as their own tax returns are concerned each partner is simply responsible for ensuring that the share of profits shown in their own tax return equals the share allocated to them in the partnership tax return.