If an individual becomes chargeable to income tax or capital gain tax for the first time, he has a duty to notify HMRC within six months of the end of the tax year in which he becomes chargeable.
For example, an individual who received dividend income on tax year 2019/20 has until 5 October 2020 to notify HMRC. In order to file a tax return, you need to be registered for self-assessment and must have a UTR or Unique Tax Identifier number. A self-assessment registration form is submitted for a UTR no. However, it can take up to 6 weeks for a UTR number to be issued by HMRC.
A self-assessment Tax return also known as “Personal Tax Return” is way for individuals to declare their annual tax on Income received or Gains/profits made on their capital investments.
Some taxes such as PAYE are collected at source, for example; Employees will have their taxes deducted before being paid by the employer and similarly savings income may be taxed by the bank when paying out interest. However, income from other sources like Rental Property, a Sole Trader Business or sale of an asset that increased in value (e.g a Buy-to-let property) will not have been taxed at source, and hence will need to be declared through a Personal Tax Return and any additional taxes paid.
Similarly, a Tax Return may be done to claim any overpaid taxes, e.g. your employer put you on wrong tax code initially and you were overcharged.