CGT and tax return

Options
ThePants999
ThePants999 Posts: 1,748 Forumite
First Anniversary Name Dropper First Post
in Savings & investments
Hi folks,

This is a tax question and I didn't really know where to put it - I figure hopefully CGT questions come up often enough in this forum that it's a reasonable place :)

Normally, all my earnings are PAYE, so I don't need to do a tax return. This year, I might have taxable capital gains. However, I've discovered that HMRC have a system whereby you can report a capital gain, and pay tax on it, immediately. (https://www.gov.uk/guidance/pay-the-tax-you-owe-on-a-capital-gain-straight-away) So my question is: if I use that system, and have no other reason to need to file a tax return, do I still need to file one? Or does immediate payment effectively remove that capital gain from the list of reasons why you might need to file a return?

Thanks in advance!

Comments

  • ProDave
    ProDave Posts: 3,749 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    Options
    Why pay immediately?

    If you have only just made the gain, file it on your 2018/19 tax return that you will receive in April 2019 and it won't be due for payment until January 2020
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    First Anniversary Name Dropper First Post
    edited 13 April 2018 at 2:47PM
    Options
    I'm not bothered about when I pay. Honestly, the only thing I care about is minimising hassle. If paying now means I can close the file on this and not have to do anything in future, that has significant value to me.

    Remember, I don't currently file a tax return. I never have, and I'd quite like to not start :)
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Name Dropper First Post First Anniversary Post of the Month
    Options
    ThePants999 wrote: »
    Remember, I don't currently file a tax return. I never have, and I'd quite like to not start :)

    Yes, that's well understood :D

    But from the link you posted:
    "The deadline for paying is the next 31 January after the end of the tax year you made a gain in. For example, if you made a gain between 6 April 2016 and 5 April 2017 the deadline to pay the tax due will be 31 January 2018."

    So whether you're doing a full tax return or just notifying them through this online service, they really don't want or need the money until next Jan (or the following one if the gain was last Friday or later) so I generally work on the principle that the money's better in my bank than theirs...

    The risk of leaving it until Jan is of course that you forget and then create yourself a problem; so if you would prefer the piece of mind and give them the cashflow earlier, I'm sure the nation will be happy with you even if it's not the MSE thing to do!
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    First Anniversary Name Dropper First Post
    Options
    OK, sure. My question remains, though - if I use this online service, either now or at the last possible minute, does that absolve me of the need to file a tax return?
  • greenglide
    greenglide Posts: 3,301 Forumite
    First Anniversary Combo Breaker Hung up my suit!
    Options
    Nothing completely absolves you from self assessment if HMRC decide you need to complete one.

    There is no obvious reason why a declared and paid for capital gain should automatically trigger a self assessment but it "might".

    Why are you so het up about it? It is a simple, logical online process. Mine takes about an hour or so, once a year.

    Not the end of the world.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Name Dropper First Post First Anniversary Post of the Month
    edited 13 April 2018 at 5:58PM
    Options
    greenglide wrote: »
    Why are you so het up about it? It is a simple, logical online process. Mine takes about an hour or so, once a year.

    Not the end of the world.

    It's true that it only takes an hour or so once you have all your information to hand, and you get used to doing them, and if you have things like bank interest and capital gains and personal pension or charity contributions that you want higher rate tax relief on, you're going to need to give HMRC some info anyway and might as well do it all at once. But still it's an hour of your life that you won't get back. My dad does one for him and mum each year and doesn't grumble as it makes sure he pays as little as possible and definitely claims what he can. But he is retired and can always find a spare hour in a week let alone a whole year. Other people have busier lives and don't love paperwork!

    But basically you only need to do a tax return if HMRC ask you to, or you have more complicated things going on than a few reliefs or a bit of CGT that you could just report online or tell them about in writing and have them adjust your paye code or collect a cheque from you. Like if you are renting out a house or running a small business etc, you need to do a return.
    ThePants999 wrote: »
    OK, sure. My question remains, though - if I use this online service, either now or at the last possible minute, does that absolve me of the need to file a tax return?

    If you were earning over £100k a year for example (causing you to start losing your personal allowance) then HMRC would write to you and tell you that you need to do a return. If they tell you that you need to do a return, you can't not do one (even if you'd prefer to do this online CGT report thing). Once you start doing them, you will generally get asked to do one every year unless you can convince them that your affairs are now simpler and you'd like to stop.

    However it sounds like in your case you have relatively simple affairs and you haven't been told to do a tax return. So, if you "use this online service, either now or at the last possible minute" then yes it does "absolve you of the need to file a tax return?" because there's no other need to do a tax return. Whereas, if you have been specifically told by HMRC that they want you to do a tax return, then the act of your doing the CGT bit online separately in real time as you go through the year doesn't absolve you of the need to do the tax return like they told you to.
  • ThePants999
    ThePants999 Posts: 1,748 Forumite
    First Anniversary Name Dropper First Post
    Options
    Great, thanks. So, as I understand it, you need to file a return if EITHER
    - you know you haven't paid the right amount of tax, or
    - HMRC tell you to.

    Hopefully neither will be true for me. Cheers!
  • capital0ne
    capital0ne Posts: 872 Forumite
    First Anniversary First Post
    Options
    ProDave wrote: »
    Why pay immediately?

    If you have only just made the gain, file it on your 2018/19 tax return that you will receive in April 2019 and it won't be due for payment until January 2020
    What part of "Normally, all my earnings are PAYE, so I don't need to do a tax return." didn't you understans?"
  • Tom99
    Tom99 Posts: 5,371 Forumite
    First Post First Anniversary
    Options
    [FONT=Verdana, sans-serif]I am in the same position, my understanding is that once you have completed the online return you are then sent a tax bill, which presumably you can defer paying until January.[/FONT]
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.5K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.7K Work, Benefits & Business
  • 608.6K Mortgages, Homes & Bills
  • 173.2K Life & Family
  • 248.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards