5 October 2009 - An important date for Self Assessment.

Individuals who have not completed a Self Assessment Tax Return in the past may consider that they do not have to do so. However, is this always the case?

What is important about 5 October 2009?
For individuals who have not already submitted their Self Assessment Tax Return for the year ended 5 April 2009, they may be in the process of collating their information in order to make the deadline for filing by paper of 31 October 2009 (this is extended until 31 January 2010 for those filing online). However, for those individuals who have never completed a return in the past and have therefore not been issued with a notice to file a return, there is a more pressing deadline to be considered. Individuals who have received untaxed income or gains in the year ended 5 April 2009 may have trigger the need to complete a tax return. Such individuals are required to notify HM Revenue and Customs (HMRC) by 5 October 2009.

What would be considered untaxed income?
It may seem unlikely that in the current climate people would be seeing a large increase in income, a typical trigger which may give rise to the completion of a tax return. However, in order to raise additional income, individuals may have rented out a property which has previously been used as a holiday or second home. This additional income would not be taxed at source and will require disclosure on an individual's tax return, together with the obligation to notify HMRC by 5 October 2009.

Any income tax due on untaxed income will be payable at a rate of 20%, or 40%, depending on whether the individual was a higher rate taxpayer.

Some windfalls such as lottery winnings, pools winnings, betting or personal injury compensation could all cause a large increase in capital, without giving rise to an income tax liability.

As redundancies have been more common recently, this may have been a catalyst for some to try something new - becoming self-employed. In this case, the notification requirement is even tighter, as set out in our story concerning registering as a self-employed person.

When do I have to pay capital gains tax (CGT)?
Some individuals may not be aware when a capital gain has arisen which would give rise to a CGT liability. As a general rule, CGT is payable if you sell something for more than you bought if for - all sorts of assets potentially attract a capital gain including land, buildings, shares, jewellery and antiques.

Of even greater surprise to individuals may be that it is not only the sale of an asset that could rise to a CGT liability but there is also the potential to incur a CGT liability if you give something away. This may be the case even if you do not receive any money for it, or you receive less than it is worth.

There are various exemptions and allowances available in respect of CGT. However, where due, CGT is generally chargeable at a rate of 18%.

Mike Warburton, Director at Grant Thornton says: "Just because you have not been sent a notification to complete a tax return does not automatically mean that you are not liable to complete one. With the deadline of 5 October 2009 for notifying HMRC of the requirement to declare any untaxed income and gains received during the year ended 5 April 2009, now is the time to consider your affairs and take action where necessary."

Contact us if you would like further advice on any of the above