If you are employed and have a total taxable income of more than £100,000 you must send a tax return to HMRC. The tax return will be for the tax year which runs from the 6th of April to the following 5th of April.
From 6th April 2024 however, the threshold at which you must send a tax return is set to increase to £150,000.
You have until 31st January following the previous 6th April to submit your tax return. For example, the 2022-23 tax year finishes on 5th April 2023. You therefore have 10 months, i.e. until 31st January 2024 to file your 2022-23 tax return and pay any tax due.
So what is taxable income?
It is not just what you get paid from your employment. Other income you receive that is taxable would be things like:-
Income from your employment
This would be your salary and other employment related income such as bonuses, commissions etc.
Self-employment
The profits you make from any form of self-employment is taxable income. You do get an annual trading allowance of £1000. If your expenses are less than £1,000 you can elect to claim the trading allowance instead of actual expenses.
State benefits
Some state benefits are actually taxable. Here is a list of the most common taxable state benefits:-
- Bereavement Allowance (previously Widow’s pension)
- Carer’s Allowance
- contribution-based Employment and Support Allowance (ESA)
- Incapacity Benefit (from the 29th week you get it)
- Jobseeker’s Allowance (JSA)
- pensions paid by the Industrial Death Benefit scheme
- the State Pension
- Widowed Parent’s Allowance
Grants and Support Schemes
Some grants and support payments made to you or your business such as the Self-Employment Income Support Scheme, the Coronavirus Job Retention Scheme, the Small Business Grant Fund, or the Retail, Hospitality, and Leisure Grant Fund are all taxable.
Pensions
Most pensions such as company and personal pensions and retirement annuities are all taxable income. This includes the state pension.
Rental Income
Profits from rental income are taxable. As above you do get an annual property allowance of £1,000 which you can claim if your expenses are less than £1,000. Also, if you are a live-in landlord and get less than the current rent-a-room limit of £7,500 only the amount above this is taxable.
Benefits in kind from your employment
There are a range of benefits you may receive as part of your employment. The most common ones are medical insurance, a company car, and professional subscriptions. These all have a monetary value and are taxable.
Income from a trust
If you receive income from a trust this is taxable income. In many cases, the trust will have already paid tax before distributing the income to you so you may get a tax refund if your tax rate is lower.
Interest on savings
Currently, there is a savings allowance of £500 for higher rate taxpayers and £1000 for lower rate taxpayers. If you have received interest above your allowance this will be taxable.
If you have any questions at all on this topic please contact us at 01902 711370 or email enquiries@uklandlordtax.co.uk if you have any questions or require our expert assistance.
