Does everyone in the UK need to file a tax return?

Most people in the UK do not need to file a tax return because any taxable income they have is taxed through a system called PAYE (paye as you earn). However, there are a few situations where you'll be required to complete a Self Assessment, also known as a personal tax return.

Does everyone have to do a tax return in the UK?

Most taxpayers in the UK are taxed at source through their workplace or their pension provider using Pay as You Earn (PAYE) and so do not need to complete a tax return. This means that the money received has already had the tax owed taken off before it is paid.

What is the minimum income to file taxes in the UK?

So how much do I need to earn to file a tax return? As a general rule, if you earn more than £1,000 of untaxed income during a tax year, you will have to do a tax return.

How do I know if I need to file a UK tax return?

you have savings income of £10,000 or more (excluding savings income in an ISA) you have income from dividends of £10,000 or more (excluding dividend income in an ISA) you have any other untaxed income of £2,500 or more. you have total taxable income of £150,000 or more before tax.

How much money do you need to earn for a tax return?

You must send a tax return if, in the last tax year (6 April to 5 April), any of the following applied: you were self-employed as a 'sole trader' and earned more than £1,000 (before taking off anything you can claim tax relief on) you were a partner in a business partnership.

My first Self Assessment tax return

Do I need to complete a tax return if I am retired?

Many pensioners do not need to complete a self-assessment tax return, but those with untaxed income or multiple sources of income may have to. Checking your income, tax codes, and assessment tax bill can help you stay compliant with HMRC rules.

What happens if I don't file a tax return in the UK?

If the return has not been filed within 3 months of the deadline, a further daily penalty of £10 per day up to a maximum of £900 is charged. If the return has not been filed within 6 months of the deadline, a further penalty of £300 or 5% of the tax owing is charged.

What if I don't need to do a tax return?

Let HMRC know as early as possible!

Make sure you get in there early, or as soon as you realise that you don't need to complete a tax return this year. You may have to pay a penalty if HMRC don't get your submission - and agree with it - before the Self Assessment deadline of 31st January.

What is the tax-free income limit in the UK?

The amount of tax-free income you can have in a year is called your Personal Allowance. The amount of this 'personal allowance' is set for each tax year. For the tax year 2025/26, the basic personal allowance is £12,570 (the same as in previous years).

Do I need to do a tax return if I earn under £1000 in the UK?

The exemption is automatic and if your self-employed income is £1,000 or less, you do not need to tell HMRC or file a tax return. For example, if you have a small gardening business and your income for the year is £900, this is covered by Trading Allowance and you will not need to pay tax on it or report this to HMRC.

Why am I paying tax if I don't earn enough?

The way PAYE works means that you may have income tax deducted from your wages throughout the year, even if overall you earn less than the personal allowance. You can usually get any PAYE overpaid throughout the year back, as a tax refund. For the 2025/26 tax year, there are three main rates of income tax.

Will HMRC tell me if I need to do a tax return?

HMRC may decide you need to file a tax return for a few different reasons. They'll usually let you know by sending you a P800 form or sending you a notice to file a tax return.

Is it mandatory to file tax in the UK?

Usually, it will depend on whether you fall within HMRC's self assessment criteria, which typically covers situations such as self employment, rental income and investment income over a certain level. Many people in the UK pay tax through Pay As You Earn and are not required to submit a tax return.

Who doesn't need to complete a tax return?

You might no longer need to send a return because, for example: you've stopped being self-employed. you no longer rent out property. you no longer pay the High Income Child Benefit Charge.

What is non taxable income in the UK?

You do not pay tax on things like: 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.

Which tax code is 1257L?

Tax code 1257L

It's used for most people with one job and no untaxed income, unpaid tax or taxable benefits (for example a company car). 1257L is an emergency tax code only if followed by 'W1', 'M1' or 'X'. Emergency codes can be used if a new employee does not have a P45.

What amount is tax-free?

The Tax-Free Personal Allowance remains at £12,570 for both 2025/26 and 2024/25 tax years.

What happens if you get caught with no tax in the UK?

If you are caught driving without tax on a public road, an out of court settlement (OCS) letter will be issued. Failure to pay this penalty for driving without tax could result in a penalty of either £1,000 or five times the amount of tax chargeable, whichever is greater.

What is the penalty for not declaring income to HMRC?

If you do not report this, you may have to pay both: the undeclared tax. a penalty worth up to double the tax you owe.

What happens if you avoid tax in the UK?

You could receive fines and/or a prison sentence. Fines vary from £5,000 to an unlimited fine. Prison sentences vary from 6 months to a life sentence. For most serious tax offences, sentences are given up to 7 years, but the Government is currently trying to increase this to 14 years.

How much savings can a pensioner have in the bank in the UK?

There isn't a savings limit for Pension Credit. However, if you have over £10,000 in savings, this will affect how much you receive. If you're a mixed-age couple (meaning only one of you is over State Pension age), you normally have to claim Universal Credit until you've both reached State Pension age.

How much can a retired person earn without paying taxes in the UK?

The amount you can receive tax-free before you start paying income tax on your pension, also known as a tax free personal allowance, is £12,570 for 2025/26. You will pay basic rate tax (20%) on your total income between £12,570 and £50,270.

Do I have to notify the tax office when I retire?

Notifying HMRC

Your employer and any pension provider will normally tell HM Revenue and Customs (HMRC) when you retire. To prevent a delay that might result in an overpayment or underpayment of tax, you should also tell them. If you're self-employed and about to retire, you must always contact HMRC.