There are a variety of reasons to file a tax return, most of the time it is because it is a legal requirement. There are some benefits to filing return regardless of whether you are legally required to or not and we have detailed some of these reasons below:
Speed up receipt of a refund
If you have had tax deducted from your salary or a previous salary in the year, for example if you worked in the UK in the same tax year you may well be due a tax refund. This will be the case if you only worked in a taxable position for some part of the year or if you qualified for reliefs such as the Sea-Farers Earnings Deduction (SED). By filing your return you will ensure that you receive the refund as quickly as possible.
Proving your income
Filing a tax return provides definitive proof of your income for a tax year. This is a requirement for a mortgage if you want to purchase a property and is largely required for any sort of finance from a bank and is virtually essential for making any kind of investments such as pensions, ISA’s or buying stocks and shares. It can also be required if you ever look to make a visa application.
By filing a tax return you will be guaranteeing that you will not be liable to any penalties. If you are required to file a return and haven’t done so late filing penalties can exceed £1,200 whilst if you file a return but are not required to you can’t be issued with any penalties.
As a UK resident there is quite literally no downside to filing a tax return. The benefits mentioned above are clear but the negatives of not filing, even though you may not owe tax have pretty serious financial implications.
If you are unsure about your tax return position or would like some additional help working out what you are supposed to do then please feel free get in touch. We are always happy to help.