Have You Submitted Your Tax Return?

What Is A Tax Return?

A tax return is a group of forms that you are required to complete in order to prove to the government how much money you have earned in the year, along with the amount of tax that you have already paid so far. By completing these forms, it then means that the government is able to decide whether you have paid enough tax already, whether you owe them any more money in tax, or if you have already paid too much. If this happens, the government will issue you a refund of the amount that you have overpaid. This is usually known as a rebate. 

The reason why it is possible for you to pay a surplus amount in your taxes is due to your type of income. If you are paid through an hourly rate, or salaried, then your employer withholds some of the money in order to pay off the money you owe to the government in taxes. If the employer withholds too much, then the government will reissue this once you have submitted your tax return. 

Do I Need To Complete A Tax Return?

Most of the time, people pay their tax at the source so they aren’t required to complete a tax return. If you are self-employed and have earned more than £1,000 in the past year then you need to complete a tax return. You will also need to complete a tax return if you are a business partner or a director of a limited company, if you don’t pay tax at source i.e. through payslips. By completing a tax return you will then know how much income tax and national insurance you will be required to pay based on the net profits your business has made within the tax year. 

When Do I Need To Submit My Tax Return?

Officially, the deadline for submitting your tax return is January. If you are looking to get a mortgage, then we suggest that you submit your tax return as quickly as possible. That way, you will have a better understanding of how much you will be able to borrow. If you do not submit your tax return by January, then you will most likely be fined, and you may also be turned down by lenders, putting your chances of getting a mortgage a lot lower  You can usually use the year before’s tax return for a mortgage, up until September of the next year.  For example, in September 2022, you would be able to use the tax return from 2020 – 2021.  However, in December 2022, you would have to have submitted your 2021 – 2022 return.  So it’s all about the preparation, and making sure you have the right documents at the time your starting to look at your mortgage abilities.

When you are looking for a mortgage, we understand that the process can be extremely stressful. We are here to help make that process a lot simpler for you, if you have any concerns about submitting a tax return, let us know and we will help you to navigate you on your way to becoming a homeowner.