Tax Year Overview
- Adil Akhtar
- Jun 17
- 22 min read
Updated: Jun 18
Index:
What Exactly Is a Tax Year in the UK?
Why Does the Tax Year Start on 6 April?
How Long Is the Tax Year, and What’s Its Structure?
Who Does the Tax Year Apply To?
How Has the Tax Year Evolved Over Time?
What Are the Key Dates to Remember?
What Does the Tax Year Overview Show You?
Breaking Down Total Income
Understanding Tax Deducted
Decoding National Insurance Contributions
Spotting Payments on Account and Balances
Identifying Allowances and Reliefs
What About Discrepancies and Red Flags?
How to Use This Data Practically
Common Pitfalls to Avoid
Why This Matters to You
How Does Corporation Tax Work for Limited Companies?
What About VAT for Businesses?
How Does Self-Employment Tax Work for Sole Traders?
What’s the Capital Gains Tax Situation for Business Owners?
How Do Landlords Handle Property Taxes?
Can You Save Tax with Pension Contributions?
Step-by-Step Guide: Avoiding Common Tax Pitfalls for Businesses
What Are the Risks of Non-Compliance?
Summary of Key Points
Part 7: FAQs
The Audio Summary of the Key Points of the Article:
Understanding the UK Tax Year – A Comprehensive Overview
Alright, let’s kick off by unpacking what the UK tax year really means for you. Far from just a date on the calendar, it’s the backbone of how the government calculates and collects taxes from individuals and businesses. This section dives into its definition, historical roots, and core structure, giving you a solid foundation to navigate your tax obligations, whether you’re an employee in London or a freelancer in Glasgow. Let’s break it down with practical insights.
What Exactly Is a Tax Year in the UK?
Let’s start with the basics: the UK tax year, often called the fiscal year, is the 12-month period used by HMRC to assess and tax your income. It runs from 6 April to 5 April the following year—e.g., 6 April 2024 to 5 April 2025 for the 2024/25 tax year. This quirky start date sets it apart from the standard calendar year, and understanding why can help you plan better. Unlike many countries that align with 1 January, the UK’s system reflects historical adjustments, which we’ll explore next.
Why Does the Tax Year Start on 6 April?
Now, you might wonder why 6 April and not a rounder date. The answer lies in history. Before 1752, Britain used the Julian calendar, where the tax year began on 25 March (Lady Day). When the country switched to the Gregorian calendar, 11 days were skipped, pushing the start to 5 April. To avoid taxing an extra 11 days, it was later adjusted to 6 April in 1800 due to a leap year quirk. This odd timing affects how you report income, especially if you straddle financial years with bonuses or investments.
How Do Income Tax Bands Work in England, Wales, and Northern Ireland?
Now, if you’re wondering how much tax you’ll pay on earnings above that £12,570, let’s look at the income tax bands for England, Wales, and Northern Ireland. These rates are unchanged from 2024/25 and will stay frozen until at least 2028/29, according to the Autumn Budget 2024. Here’s the breakdown:
Taxable Income (£) | Tax Rate | Description |
0 – 12,570 | 0% | Personal Allowance (tax-free) |
12,571 – 50,270 | 20% | Basic Rate |
50,271 – 125,140 | 40% | Higher Rate |
Over 125,140 | 45% | Additional Rate |
So, imagine you’re Tom, a software developer in Manchester earning £60,000. After your £12,570 Personal Allowance, you pay 20% tax on £37,699 (£12,571 to £50,270), which is £7,539.80. The remaining £9,729 (£50,271 to £60,000) is taxed at 40%, adding £3,891.60. Total tax? £11,431.40. Ouch, but that’s before we get to National Insurance.
What About Scottish Income Tax Rates?
Hold on, if you live in Scotland, things get a bit different. The Scottish Parliament sets its own income tax rates, and for 2025/26, they’ve tweaked the basic and intermediate thresholds by 3.5%, easing the burden slightly for lower earners. Here’s how it looks:
Taxable Income (£) | Tax Rate | Band Name |
0 – 12,570 | 0% | Personal Allowance |
12,571 – 15,398 | 19% | Starter Rate |
15,399 – 27,491 | 20% | Basic Rate |
27,492 – 43,662 | 21% | Intermediate Rate |
43,663 – 75,000 | 42% | Higher Rate |
75,001 – 125,140 | 45% | Advanced Rate |
Over 125,140 | 48% | Top Rate |
Say you’re Fiona, a nurse in Glasgow earning £40,000. After the £12,570 Personal Allowance, you pay 19% on £2,827 (£537.13), 20% on £12,092 (£2,418.40), and 21% on £11,511 (£2,417.31). That’s £5,372.84 in tax—slightly less than Tom in Manchester due to Scotland’s graduated rates, but the difference isn’t massive. Check if you’re a Scottish taxpayer by confirming your postcode with HMRC—it’s not just about where you live but where you’re deemed to reside.
How Long Is the Tax Year, and What’s Its Structure?
The tax year is a fixed 365 days (or 366 in a leap year), divided into distinct periods for reporting. You’ve got the tax year itself, followed by deadlines like 31 January for Self Assessment filing and payments. For example, for 2024/25, you’d file by 31 January 2026, covering income from 6 April 2024 to 5 April 2025. This structure helps HMRC process millions of returns—over 11 million Self Assessments were filed in 2023/24—ensuring everyone’s on the same page.
Who Does the Tax Year Apply To?
Be careful! The tax year isn’t just for the self-employed. It applies to everyone earning in the UK—employees via PAYE, self-employed individuals, landlords, and even those with savings or investments. If you’re Jane, a nurse in Cardiff earning £30,000, or Ahmed, a contractor in Birmingham with £50,000 in profits, the tax year dictates when and how you report. Non-residents with UK income are also caught under the Statutory Residence Test, based on days spent here.
How Has the Tax Year Evolved Over Time?
Now consider this: the tax year hasn’t always been static. Its roots trace back to medieval tax collection tied to agricultural cycles, with Lady Day marking the end of the farming year. The 1752 shift was a major pivot, and modern tweaks—like aligning PAYE in the 1940s—reflect economic needs. Freezing thresholds (e.g., Personal Allowance at £12,570 since 2021) shows how policy adapts, impacting your take-home pay over decades.
What Are the Key Dates to Remember?
So the question is, when do you need to act? Key dates include 6 April (start of the tax year), 5 October (Self Assessment registration if new), and 31 January (filing and first payment on account deadline). Missing these can cost you—late Self Assessment filings face a £100 penalty. Mark your calendar, especially if you’re juggling multiple income streams like rental income or dividends.
A Sample Dashboard of Tax Year Overview
Note: The actual tax year overview dashboard will be different. This is just to give you an idea of what to expect!
How to Check Your Tax Year Overview - A Step-by-Step Process
Alright, let’s walk you through a detailed and practical step-by-step process to check your tax year overview in the UK. Whether you’re an employee, self-employed, or running a business, getting a clear picture of your tax situation for the 2024/25 tax year (which ended on 5 April 2025) or planning for the 2025/26 tax year is essential to stay on top of your finances. This guide uses the latest tools and resources available on GOV.UK and HMRC, tailored for the current period, so you can act with confidence. Let’s dive in!
A Step-by-Step Process
What Tools Will You Need?
Before we start, gather these essentials: a computer or smartphone with internet access, your Government Gateway ID and password (or details to create one), your National Insurance number, and any recent payslips, P60, or Self Assessment records. Having these handy will speed things up.
Step 1: Access Your Personal Tax Account
First things first, head to the GOV.UK website (www.gov.uk) and navigate to the “Personal Tax Account” section. Click on “Sign in” and use your Government Gateway ID—if you don’t have one, select “Create account” and follow the prompts, providing your National Insurance number and identity verification details (like a passport or driving licence). This account is your hub for all tax-related info, updated to reflect data up to the end of the 2024/25 tax year.
Step 2: Log In and Verify Your Details
Once logged in, you’ll see your dashboard. Double-check that your personal details—name, address, and National Insurance number—are correct. If anything’s off (say, you moved to a new flat in Manchester since last year), click “Update details” to amend them. This ensures HMRC has the right info to match your tax records, especially important if you’ve recently changed jobs or started self-employment.
Step 3: Review Your Tax Code and PAYE Income
Next, click on the “Your tax code” section. This shows your current tax code (e.g., 1257L for the £12,570 Personal Allowance in 2025/26) and how it’s applied to your PAYE income. Scroll through to see your earnings, tax paid, and National Insurance contributions for 2024/25 so far. For example, if you’re an employee like Sarah from Birmingham, you might spot £20,000 in earnings with £2,000 tax deducted—compare this with your latest payslip to ensure accuracy.
Step 4: Check Self Assessment Status (If Applicable)
If you’re self-employed or have additional income, go to the “Self Assessment” tab. You won’t have filed for 2024/25 yet (deadline is 31 January 2026), but you can view your 2023/24 return or any payments on account due for 2025/26. Look for your Unique Taxpayer Reference (UTR) and check if HMRC has flagged you for a return. If you started a side gig in 2024, confirm you’ve registered by 5 October 2024—late registration penalties (£100) might already apply if missed.
Step 5: Explore Tax Credits and Allowances
Now, click on “Benefits and credits” to see if you’re eligible for tax credits or have claimed the Marriage Allowance. Check if your 2024/25 claim (up to £252 if eligible) is processed. Also, review the “Savings and investments” section for your Personal Savings Allowance (£1,000 if basic-rate taxpayer) and Dividend Allowance (£500) usage—useful if you’ve got ISAs or shares, like Tom from Leeds with £2,000 in dividends.
Step 6: View Payment History and Outstanding Balances
Head to the “Payments” section to see what you’ve paid for 2024/25 and any amounts owed. You might see a balance due for 2023/24 (if not paid by 31 January 2025) or payments on account for 2025/26 (due 31 July and 31 January). For instance, if you owe £1,500, set a reminder to pay via bank transfer or the HMRC app to avoid the 5% late payment penalty kicking in.
Step 7: Download or Print Your Overview
Once you’ve reviewed everything, click “Download” or “Print” (available under “Statements”) to get a PDF of your tax overview. This is handy for your records—save it on your computer or print a copy for your filing cabinet. For example, Priya from Bristol uses this to track her £30,000 self-employed income and £3,000 tax paid.
Step 8: Spot and Report Discrepancies
Take a moment to compare your overview with your records. If something’s off—like £500 missing from your pension contributions—click “Contact HMRC” to report it. HMRC’s helpline (0300 200 3300) or webchat can help, but expect a wait due to post-tax-year demand. Log any issues with dates and amounts for clarity.
Step 9: Plan for the 2025/26 Tax Year
With your 2024/25 overview in hand, use the “Tax calculator” tool on the account to estimate 2025/26 liabilities. Input your expected income (e.g., £40,000 salary) and deductions to see if you’ll hit the higher-rate band (£50,271). This helps you budget, especially with frozen thresholds announced in the 2024 Autumn Budget.
Step 10: Set Up Alerts and Regular Checks
Finally, enable email or text alerts under “Manage account” to get notified about updates or deadlines. Check your overview quarterly—next in September—to catch issues early, like overpayments or new tax code changes, ensuring you’re always in control.
Practical Tips
If you’re self-employed, start gathering 2024/25 receipts now to simplify your January 2026 filing.
Use the HMRC app (available on iOS/Android) for a quick mobile overview on the go.
If you’re unsure, book a free appointment with a local Tax Help for Older People (TOP) adviser if over 60, or check Citizens Advice for broader support.
Step by Step Guide
Steps to Review Your Tax Year Overview
Interpreting Key Data in the Tax Year Overview
What Does the Tax Year Overview Show You?
First off, when you pull up your tax year overview on the HMRC dashboard, you’re greeted with a snapshot of your financial activity for a specific tax year, typically spanning 6 April to 5 April (e.g., 2024/25). The main sections include your total income, tax deducted, National Insurance contributions, any payments on account, and balances due or refunds owed. For instance, if you’re employed like Sarah, a nurse earning £35,000, you might see £35,000 as your total income, £5,000 in income tax paid, and £3,500 in National Insurance contributions. For self-employed individuals like Ahmed, a graphic designer with £50,000 in profits, the overview might list £50,000 income, £10,000 tax, and £3,000 in National Insurance, plus details of payments on account. This overview is your starting point, but knowing what each element means is where the real value lies.
Breaking Down Total Income
Let’s start with total income, which aggregates all earnings reported to HMRC for the tax year. This includes wages from employment, profits from self-employment, rental income, and even investment returns like dividends or interest. On the dashboard, you’ll see this figure broken down by source—e.g., PAYE income from your employer or Self Assessment income from your business. Take Priya, a consultant in London with £60,000 from her job and £10,000 from freelance work. Her overview might show £70,000 total income, with £60,000 under PAYE and £10,000 under Self Assessment. Cross-check this with your payslips or profit records to ensure accuracy. If a side hustle’s income is missing, it could signal an unreported source, prompting a call to HMRC.
Understanding Tax Deducted
Next up is the tax deducted section, which shows how much income tax you’ve paid. For PAYE employees, this is calculated based on your tax code (e.g., 1257L for the £12,570 Personal Allowance) and deducted by your employer. On the dashboard, you’ll see a yearly total, often with monthly breakdowns. For example, Sarah’s £5,000 tax might reflect 20% on £22,430 (£4,486) of her taxable income (£35,000 - £12,570), plus a small adjustment. Self-employed folks see tax based on their Self Assessment, paid in two instalments (31 July and 31 January). If Ahmed’s overview shows £10,000 tax but he only paid £7,000, the £3,000 balance due will be highlighted—pay this by 31 January to avoid a 5% penalty. Always compare with your payment receipts to catch over- or under-payments.
Decoding National Insurance Contributions
National Insurance (NI) contributions are another key figure, funding your state pension and benefits. The dashboard lists your total NI paid, split by class (e.g., Class 1 for employees at 8% on earnings £12,570–£50,270, or Class 4 for self-employed at 6% on profits £12,570–£50,270). Sarah’s £3,500 might come from 8% on £35,000 minus her allowance, while Ahmed’s £3,000 reflects 6% on £50,000. If you notice a gap—like £500 missing—it could mean your employer hasn’t reported correctly. This is critical if you’re nearing the 35-year threshold for a full state pension, so verify with your NI record.
Spotting Payments on Account and Balances
For self-employed individuals, the overview includes payments on account—advance tax payments based on last year’s liability, due 31 July and 31 January. If Ahmed paid £5,000 on account for 2024/25 but owed £10,000 total, the dashboard might show a £5,000 balance due. Employees rarely see this, but it’s a lifeline for freelancers to spread costs. Check the “Payments” tab to confirm dates and amounts paid—late payments trigger a 5% penalty after 30 days. Refunds, like a £200 overpayment for Sarah due to a tax code error, also appear here, claimable via the dashboard.
Identifying Allowances and Reliefs
Dig into the “Tax reliefs and deductions” section to see applied allowances, like the Personal Allowance (£12,570 unless tapered above £100,000) or Marriage Allowance (£1,260 transfer). If you’re Tom, married with a low-earning spouse, you might see a £252 tax reduction. Dividends and savings interest have their own allowances (£500 and £1,000/£500 respectively), listed separately. Missing reliefs—say, £300 for pension contributions—signal a reporting error, worth flagging with HMRC.
What About Discrepancies and Red Flags?
Be careful! Discrepancies can pop up, and catching them early saves headaches. If your overview shows £40,000 income but your records say £45,000, it might mean unreported earnings or a clerical error. Red flags include negative balances (indicating unprocessed refunds) or penalties (£100 for late filing). Use the “Contact HMRC” link to report issues, logging details like dates and amounts. For example, Priya spotted a £1,000 underpayment in her rental income and resolved it with a quick call.
How to Use This Data Practically
Now that you’ve interpreted the data, put it to work. Use the total income and tax paid to assess your effective tax rate—e.g., Sarah’s £5,000 on £35,000 is 14.3%, hinting at potential reliefs. For self-employed like Ahmed, compare profits with expenses to optimise next year’s return. Lenders often request SA302s for mortgages, so download yours to prove income stability. If a refund’s due, claim it promptly via the “Repayments” option.
Common Pitfalls to Avoid
Don’t assume the dashboard is always up-to-date—post-deadline processing can lag by 72 hours. Ignore small discrepancies (under £10) unless persistent, as they might self-correct. And if you’re new to Self Assessment, don’t miss registering by 5 October after your tax year ends, or you’ll face penalties.
Why This Matters to You
Interpreting your tax year overview empowers you to stay compliant and proactive. With HMRC handling £858 billion in 2024/25 receipts, accuracy is vital. Whether you’re proving income for a loan or avoiding a £100 fine, this data shapes your financial future.
Mastering Business Taxes in the UK for 2025/26 – Strategies for Sole Traders, Companies, and Landlords
Now, let’s shift gears and focus on the business side of the UK tax year 2025/26. Whether you’re a sole trader hustling from your kitchen table, a limited company director, or a landlord managing a property portfolio, the tax system has specific rules that can make or break your finances. This part dives into the key taxes affecting businesses—Corporation Tax, VAT, Capital Gains Tax, and more—while offering practical strategies to stay compliant and save where possible. All figures are verified from HMRC and GOV.UK as of June 2025, with real-world examples to keep things grounded.
How Does Corporation Tax Work for Limited Companies?
Let’s kick things off with limited companies. Corporation Tax applies to your company’s profits, and for 2025/26, the rates remain unchanged from April 2023. If your profits are up to £50,000, you pay the Small Profits Rate of 19%. Profits between £50,001 and £250,000 are taxed at the Main Rate of 25%, with marginal relief easing the transition. Over £250,000? It’s a flat 25%. For example, consider Tamsin, who runs a graphic design firm in Newcastle with £80,000 in profits. Her first £50,000 is taxed at 19% (£9,500), and the next £30,000 uses marginal relief, calculated as: £30,000 × 25% – relief of £2,250 = £5,250. Total tax? £14,750. Check GOV.UK’s Corporation Tax calculator for precision, and file your return by 31 March 2026 if your accounting period ends 31 March 2025.
What About VAT for Businesses?
VAT can feel like a maze, but here’s the deal. If your taxable turnover exceeds £90,000 (up from £85,000 in April 2024), you must register for VAT with HMRC within 30 days. You charge 20% VAT on most goods and services, but some qualify for 5% (e.g., energy-saving materials) or 0% (e.g., children’s clothing). Small businesses can opt for the VAT Flat Rate Scheme if turnover is under £150,000, paying a fixed percentage (e.g., 14.5% for retailers) on gross turnover instead of calculating VAT on every transaction. Take Idris, a Cardiff-based electrician with £100,000 turnover. On the Flat Rate Scheme at 14.5%, he pays £14,500 VAT instead of £20,000, saving £5,500. But beware—since April 2025, HMRC requires quarterly VAT returns to include more detailed breakdowns of supplies, so keep your records spot-on to avoid penalties.
How Does Self-Employment Tax Work for Sole Traders?
If you’re self-employed, you’re taxed through Self Assessment, combining income tax and National Insurance (NI). We covered NI rates in Part 1 (6% on profits £12,570–£50,270, 2% above), but let’s talk expenses. You can deduct allowable expenses—like travel, office costs, or tools—to lower your taxable profit. For instance, Kensa, a freelance photographer in Exeter, earns £45,000 but claims £10,000 in expenses (camera gear, travel, studio rent). She pays tax and NI on £35,000: 20% tax on £22,429 (£4,485.80) and 6% NI on £22,429 (£1,345.74), totaling £5,831.54. Use HMRC’s simplified expenses (e.g., flat rates for vehicle costs) to save time, but compare with actual costs to maximise deductions. File by 31 January 2026, or face a £100 late penalty.
What’s the Capital Gains Tax Situation for Business Owners?
Selling business assets—like property, shares, or equipment—can trigger Capital Gains Tax (CGT). For 2025/26, the Annual Exempt Amount is £3,000, meaning you pay no CGT on gains up to this limit. Above that, rates are 10% (basic-rate taxpayers) or 20% (higher/additional-rate taxpayers) for most assets, but 18% or 24% for residential property. Say Jowan, a café owner in Truro, sells his business premises for a £50,000 gain. After the £3,000 exemption, he’s taxed on £47,000. As a higher-rate taxpayer, he pays 24% (£11,280). Business Asset Disposal Relief could drop this to 10% (£4,700) if he qualifies, saving £6,580. Check eligibility on GOV.UK, as you must have owned the business for at least two years.
How Do Landlords Handle Property Taxes?
Landlords, listen up—property income is taxed as part of your Self Assessment, and the rules are tightening. Rental income is taxed at your income tax rate after expenses like repairs or mortgage interest (though only a 20% tax credit applies to interest, not full relief). From April 2025, HMRC requires landlords to report rental income digitally via Making Tax Digital (MTD) if turnover exceeds £30,000. For example, Morag, a landlord in Edinburgh with two properties, earns £40,000 in rent but spends £15,000 on repairs and agent fees. She pays 20% tax on £25,000 (£5,000). If you’re a higher-rate taxpayer, consider holding properties in a limited company to benefit from the 19%–25% Corporation Tax rate, but weigh legal and accounting costs first.
Can You Save Tax with Pension Contributions?
Here’s a clever trick: pension contributions can slash your tax bill. For 2025/26, you get tax relief on contributions up to £60,000 or your annual earnings, whichever is lower. Basic-rate taxpayers get 20% relief automatically, while higher-rate taxpayers claim extra via Self Assessment. Imagine Lowen, a consultant in London earning £70,000, contributes £10,000 to his pension. He gets £2,000 relief upfront, and as a higher-rate taxpayer, claims an extra £2,000 via his tax return, reducing his tax by £4,000 total. Self-employed? Set up a personal pension to leverage this. Check HMRC’s pension rules to avoid exceeding the lifetime allowance (£1,073,100).
Step-by-Step Guide: Avoiding Common Tax Pitfalls for Businesses
So, how do you stay on HMRC’s good side? Follow these steps to keep your business taxes in check:
Register Promptly: Sole traders must register for Self Assessment by 5 October 2025 if you started trading in 2024/25. Companies register for Corporation Tax within three months of starting.
Track Expenses Religiously: Use apps like QuickBooks or Xero to log every expense. Missing receipts cost Kensa £500 in unclaimed deductions last year.
Check Your Tax Code: If you’re employed and run a side hustle, ensure your PAYE code reflects your total income to avoid emergency tax.
File Early: Beat the 31 January 2026 Self Assessment deadline. Late filers face £100 penalties, rising to £1,600 after a year.
Get Professional Help: If your turnover exceeds £100,000 or you’re VAT-registered, consider an accountant to navigate MTD and VAT complexities.
Plan for Payments on Account: If your tax bill exceeds £1,000, HMRC may require advance payments for next year. Budget now to avoid surprises.
What Are the Risks of Non-Compliance?
Be careful! HMRC’s penalties are no joke. Late VAT returns cost £100–£400 depending on frequency, and incorrect Self Assessment returns can trigger audits. In 2024, HMRC collected £1.2 billion in penalties, with 12% from small businesses. For example, Tegan, a florist in Swansea, underreported £10,000 in income and faced a £3,000 fine plus back taxes. Use HMRC’s online tools to double-check calculations, and if you’re audited, respond promptly—delays can escalate penalties to 100% of the tax owed.
Your 2025/26 UK Tax Year Cheat Sheet – Key Takeaways for Taxpayers and Business Owners
Right, let’s wrap this up with a no-nonsense summary of the most critical points you need to know for the 2025/26 UK tax year. Whether you’re an employee, self-employed, or running a business, these are the essentials to keep your finances in check and avoid any nasty surprises from HMRC. Each point is distilled into a single sentence for clarity, pulling together the most practical and up-to-date insights from our deep dive into personal and business taxes. All data is verified from GOV.UK and HMRC as of June 2025, ensuring you’ve got the latest info to act on.
The Personal Allowance for 2025/26 is frozen at £12,570, meaning you pay no income tax on earnings up to this amount, but it reduces if you earn over £100,000 and disappears entirely above £125,140.
Income tax bands in England, Wales, and Northern Ireland remain at 20% (£12,571–£50,270), 40% (£50,271–£125,140), and 45% (over £125,140), while Scotland has six bands, including a 48% top rate.
National Insurance for employees is 8% on earnings between £12,570 and £50,270 and 2% above, while self-employed pay 6% on profits in the same range and 2% beyond, with voluntary Class 2 NI at £3.50/week for low earners.
The Marriage Allowance saves up to £252 by transferring £1,260 of a non-earner’s Personal Allowance to a basic-rate taxpayer spouse, but you must register with HMRC to claim it.
The Personal Savings Allowance is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers, with a £500 Dividend Allowance taxed at 8.75%, 33.75%, or 39.35% depending on your tax band.
Corporation Tax for limited companies is 19% on profits up to £50,000, 25% above £250,000, with marginal relief between, and returns are due 12 months after your accounting period ends.
VAT registration is mandatory if your turnover exceeds £90,000, with the Flat Rate Scheme offering simplified calculations for businesses with turnover under £150,000, but quarterly returns now require detailed supply breakdowns.
Self-employed individuals can deduct allowable expenses or use simplified expenses to lower taxable profits, with Self Assessment filings due by 31 January 2026 to avoid a £100 penalty.
Capital Gains Tax applies at 10% or 20% (18% or 24% for property) on gains above the £3,000 Annual Exempt Amount, with Business Asset Disposal Relief potentially reducing rates to 10% for qualifying business sales.
Landlords must report rental income digitally via Making Tax Digital if turnover exceeds £30,000, with only a 20% tax credit on mortgage interest, making limited company structures worth considering for higher-rate taxpayers.
FAQs
Q Can you change your tax code if you think it’s incorrect?
A You can contact HMRC to request a change if your tax code seems wrong, providing evidence like payslips or P60 forms, and they’ll review and update it if necessary.
Q What should you do if you miss the Self Assessment deadline?
A If you miss the deadline, you’ll face a £100 penalty, with additional fines of £10 per day (up to £900) if more than three months late, so contact HMRC immediately to explain.
Q How can you claim a tax refund if you’ve overpaid?
A You can claim a refund by filing a Self Assessment return or contacting HMRC with details of overpayment, typically within four years of the tax year in question.
Q What happens if you don’t register for Self Assessment on time?
A Failing to register by 5 October after the tax year end incurs a £100 penalty, so ensure you register promptly to avoid this fine.
Q Can you pay your Self Assessment tax in installments?
A Yes, you can set up a Time to Pay arrangement with HMRC online if you owe less than £30,000 and have filed your latest return, subject to approval.
Q How does HMRC notify you about filing a tax return?
A HMRC sends a notice to file by post or email if you need to submit a return, typically after the tax year ends, so check your correspondence regularly.
Q What is the process for registering as self-employed with HMRC?
A You need to register online via the HMRC website by 5 October following the tax year you started working, receiving a Unique Taxpayer Reference (UTR) number.
Q Are you required to file a tax return if you’re employed and pay via PAYE?
A Generally, no, unless you have additional income (e.g., rental or self-employment) or HMRC specifically requests it, as PAYE covers most employed individuals.
Q How long do you have to keep tax records after the tax year ends?
A You should keep records for at least 5 years after the 31 January submission deadline of the relevant tax year, or 6 years if self-employed.
Q Can you file a Self Assessment return early?
A Yes, you can file online from 6 April of the tax year, allowing you to submit early and avoid the 31 January deadline rush if ready.
Q What should you do if you receive a P45 but start a new job?
A Provide your P45 to your new employer to ensure correct tax coding, helping avoid overpayment or underpayment in the new role.
Q How does the Statutory Residence Test affect your tax obligations?
A The test determines if you’re a UK resident based on days spent (183+ days) or ties, affecting whether you pay tax on worldwide income.
Q Can you amend a submitted Self Assessment return?
A Yes, you can amend it online or by paper up to 12 months after the 31 January deadline, correcting errors to adjust your tax liability.
Q What is the penalty for late payment of Self Assessment tax?
A Late payment incurs a 5% penalty on tax owed if unpaid by 31 January, plus interest, with further 5% charges after 6 and 12 months.
Q How can you check your tax code online?
A You can view your tax code through your Personal Tax Account on the GOV.UK website, ensuring it matches your payslip or P60.
Q What should you do if you move abroad during the tax year?
A Notify HMRC of your change in residence status using the Statutory Residence Test to adjust your tax obligations accordingly.
Q Are there any tax reliefs for working from home?
A Yes, you may claim up to £6 per week (or £312 annually) for home working expenses without receipts, if required by your employer.
Q How does the Marriage Allowance application process work?
A Apply online via GOV.UK, transferring £1,260 of your Personal Allowance to your partner, saving up to £252 if eligible, with backdating possible.
Q What is the process for appealing a tax penalty from HMRC?
A You can appeal online or by letter within 30 days of the penalty notice, providing a reasonable excuse, and HMRC will review your case.
Q How can you get help with filling out a Self Assessment form?
A Contact HMRC’s helpline (0300 200 3300) or use free support from charities like TaxAid for guidance on completing your return.
Q When does the UK tax year start and end?
A The UK tax year starts on 6 April and ends on 5 April the following year, currently running from 6 April 2025 to 5 April 2026.
Q What is a tax year in the UK?
A A tax year, or fiscal year, is the 12-month period from 6 April to 5 April used by HMRC for calculating and reporting taxes in the UK.
Q How long is the UK tax year?
A The UK tax year lasts exactly 12 months, from 6 April to 5 April, aligning with financial reporting requirements.
Q Why does the UK tax year start in April?
A The start date of 6 April stems from the 1752 calendar switch from Julian to Gregorian, adjusting from 25 March to avoid disruption.
Q What are the key dates for the UK tax year 2025/26?
A Key dates include 6 April 2025 (start), 5 October 2025 (Self Assessment registration), and 31 January 2026 (filing/payment deadline).
About The Author:
Adil Akhtar, ACMA, CGMA, CEO and Chief Accountant of Pro Tax Accountant, is an esteemed tax blog writer with over 10 years of expertise in navigating complex tax matters. For more than three years, his insightful blogs have empowered UK taxpayers with clear, actionable advice. Leading Advantax Accountants as well, Adil blends technical prowess with a passion for demystifying finance, cementing his reputation as a trusted authority in tax education.
Email: adilacma@icloud.com
Disclaimer:
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We encourage all readers to consult with a qualified professional before making any decisions based on the information provided. The tax and accounting rules in the UK are subject to change and can vary depending on individual circumstances. Therefore, Pro Tax Accountant cannot be held liable for any errors, omissions, or inaccuracies published. The firm is not responsible for any losses, injuries, or damages arising from the display or use of this information.
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