Who Needs to File a Tax Return?

Introduction

Most people don’t need to file a tax return because their income has already been taxed through the PAYE system.

However, if you meet HMRC’s criteria, you must file a tax return. If HMRC has sent you a ‘notice to complete a tax return’, they’ll be expecting your return by the deadline. If you haven’t received a notice but think you meet the criteria, you must register with HMRC to notify them of your tax filing obligation.

If HMRC has sent you a notice but you don’t actually meet their criteria for that tax year, you can request to cancel your filing requirement.

HMRC’s criteria often change each tax year, so you should check their current requirements to understand if you have a filing obligation. Some common reasons you may need to file a tax return are explained below.

Property Income

If you profit from renting out land or buildings, you’ll likely need to pay tax on these profits through a tax return.

You calculate the profit by taking the income you receive from the property and deducting allowable expenses.

There are certain circumstances where you may receive property income but don’t need to file a tax return:

• If property income (before expenses) is less than £1,000, the property allowance automatically applies and no tax will be due
• If you rent a room in your house for less than £7,500 and meet the conditions for rent-a-room relief, relief automatically applies and no tax will be due

It’s sometimes beneficial to disapply automatic reliefs and file a tax return to claim a loss. You can find more information on property income here.

Investment Income

Savings Income

Most people don’t pay tax on their interest because they’re entitled to a savings allowance which taxes the interest at 0%.

The allowance depends on your tax rate:

• Basic rate taxpayers: First £1,000 of interest taxed at 0%
• Higher rate taxpayers: First £500 of interest taxed at 0%
• Additional rate taxpayers: No savings allowance – all interest is likely taxable

Interest may also be covered by the savings starting rate band or any unused personal allowance.

Interest from cash held in an ISA or certain NS&I products is tax-exempt and doesn’t need to be reported to HMRC.

Dividend Income

In the 2025/26 tax year, individuals are entitled to a £500 dividend allowance. Meaning the first £500 of dividends received are taxed at 0%.

Dividends from shares held in an ISA are tax-exempt and don’t need to be reported to HMRC.

Reporting Requirements

• If your savings or dividend income exceeds £10,000, you’ll need to submit a tax return
• If your savings or dividend income is less than £10,000 but tax is due, you must make HMRC aware by 5th October after the end of the tax year. HMRC will adjust your tax code to collect the estimated tax due

Self-Employment Income

If you carry on a trade, you’ll likely need to pay tax on this income by submitting a tax return.

If your trading income (before deducting expenses) is less than £1,000, the trading allowance automatically applies. No tax will be due and you won’t need to submit a tax return if this is your only source of income.

If your trading income exceeds £1,000, you’ll need to file a tax return.

It’s sometimes beneficial to submit a tax return even when you’re not required to. You can find out more here.

Capital Gains

If you dispose of an asset, capital gains tax may be due. Most commonly, this involves selling an asset for a profit where the sale proceeds exceed the cost.

Whether capital gains tax is due depends largely on whether the asset is exempt and if allowances or reliefs are available.

If capital gains tax is due, you can choose how to report and pay your liability:

• Use HMRC’s online service
• Submit a tax return

If you already submit a tax return, you can still use the online service, but you must include the details of your capital gains on your tax return.

Other Reasons

You may also need to file a tax return if you meet any of these criteria:

• You need to pay the High Income Child Benefit Charge
• You need to claim employment expenses of more than £2,500
• You receive income from a trust
• You receive foreign income