A guide to Self-Assessment 2018-19

Income Tax is a tax you pay on your income and a tax return required to submit each year. See our tips for Self-Assessment 2018-19 Not all the incomes are taxable and you do not have to pay tax on all types of income. We have prepared a simple guide to help you work out your Tax Return 2018-19.

The income you have to pay tax on are such as:

money you earn from employment
profits you make if you’re self-employed – including from services you sell through websites or apps
some state benefits
most pensions, including state pensions, company and personal pensions and retirement annuities
rental income (unless you’re a live-in landlord and get less than the rent a room limit)
benefits you get from your job
income from a trust
interest on savings over your savings allowance

On the other hand, see the list of incomes you do not have to pay tax on:

the first £1,000 of income from self-employment – this is your ‘trading allowance’
the first £1,000 of income from property you rent (unless you’re using the Rent a Room Scheme)
income from tax-exempt accounts, like Individual Savings Accounts (ISAs) and National Savings Certificates
dividends from company shares under your dividends allowance
some state benefits
premium bond or National Lottery wins
rent you get from a lodger in your house that’s below the rent a room limit
Income Tax allowances and reliefs
Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax.

The amount of tax you pay can also be reduced by tax reliefs if you qualify for the, why not contact us. DebitsCredits.co.uk is the cheapest online accountancy firm. We are ranked No.4 in the UK for being best in the UK in accounting category on trust score. Checkout our reviews here: See our clients’s review about us

There are number of ways to pay Income Tax

Pay As You Earn (PAYE)

Most people pay Income Tax through PAYE. This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.

Tax on state benefits

Your tax code can take account of taxable state benefits, so if you owe tax on them (for example for the State Pension) it’s usually taken automatically from your other income.

If the State Pension is your only income, HM Revenue and Customs (HMRC) will write to you if you owe Income Tax. You may need to fill in a Self-Assessment 2018-19.

Self-Assessment 2018-19 / Tax Return 2018-19

If your financial affairs are more complex (for example you’re self-employed 2018-19 or have a high income) you may pay Income Tax and National Insurance through Self-Assessment 2018-19. You’ll need to fill in a tax return 2018-19.

Do you know when you need to register for Self-Assessment 2018-19.

£1,000 from self-employment 2018-19
£2,500 from other un-taxed income, for example from tips or renting out a property
Contact the Income Tax helpline if your income from renting out a property was between £1,000 and £2,500.

A lot of people qualify for various e benefits and do you know which ones are taxable and tax free? Here is a short list of those benefits.

State benefits that are taxable

The most common benefits that you pay Income Tax on are:

the State Pension
Jobseeker’s Allowance (JSA)
Carer’s Allowance
contribution-based Employment and Support Allowance (ESA)
Incapacity Benefit (from the 29th week you get it)
Bereavement Allowance
pensions paid by the Industrial Death Benefit scheme
Widowed Parent’s Allowance
Widow’s pension

Tax-free state benefits

The most common state benefits you do not have to pay Income Tax on are:

Housing Benefit
income-related Employment and Support Allowance (ESA)
Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
Working Tax Credit
Child Tax Credit
Disability Living Allowance (DLA)
Child Benefit (income-based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
Personal Independence Payment (PIP)
Guardian’s Allowance
Attendance Allowance
Pension Credit
Winter Fuel Payments and Christmas Bonus
free TV licence for over-75s
lump-sum bereavement payments
Maternity Allowance
Industrial Injuries Benefit
Severe Disablement Allowance
Universal Credit
War Widow’s Pension

Work out if you need to pay Income Tax

To work out if you should be paying Income Tax, follow these steps.

Add up all your taxable income, including taxable state benefits.
Work out your tax-free allowances.
Take your tax-free allowances away from your taxable income.

If there’s anything left, you’re a taxpayer. Contact the Income Tax helpline if you’re not already paying tax.

Check you’re paying the right amount, if not sure then give us a call on 0113 873 0107 and we will give you free consultation and all the help available.

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