Are you aware that when it comes to filing your taxes, your business income isn't the only thing you need to declare? Many people overlook other sources of income that are just as important to report to HMRC.
When you file a self-assessment tax return, you're providing HMRC with a comprehensive overview of your income for the tax year. This means you need to include all taxable income, not just what you earned from your business.
Here's a list of some types of income you should be declaring:
Employment Income: This includes any wages, salaries or bonuses you receive from your job.
Pension Income: If you're receiving a pension, whether it's from a private pension scheme or the state, it's considered taxable income.
Dividends: If you own shares in a company, any dividends you receive from those shares are taxable.
Savings Interest: Interest earned from savings accounts, ISAs, or other investments is subject to tax.
Some Benefits: Certain state benefits may be taxable. However, not all benefits are taxable, so it's essential to check this with your accountant or on the HMRC website.
Rental Income: If you earn income from renting out property or land, this must be declared on your tax return.
Profit on the Sale of an Asset: If you sell an asset like property, shares, or valuable possessions and make a profit, this may be subject to capital gains tax.
While there are specific rules and thresholds for each type of income, simply being aware of the various sources can help you avoid issues later on. Failing to include all taxable income on your tax return can result in penalties or fines from HMRC.
Thankfully, HMRC provides excellent guidance on what to include when filing your return. You can find detailed information on their website or within the help section of the tax return itself. Taking the time to familiarise yourself with these guidelines can save you a lot of hassle and ensure you are meeting your tax obligations.
Conclusion
In conclusion, remember that business income is just one piece of the puzzle when it comes to your tax return. By understanding and reporting all taxable income, you can stay on the right side of the tax laws and avoid any unpleasant surprises from HMRC.
We cover types of income and what expenses are allowable in our course Sole Trading Made Simple, which you can learn more about here.
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