Unexpected reasons you might need to file a self-assessment tax return

The 31 January deadline for self-assessment is fast approaching. If you think you don’t need to file a tax return, you might be mistaken.  

Here are some scenarios where you could be required to file a return.  

Side hustles and extra income  

If you’re making money on the side, whether through online platforms like Vinted, eBay, or Etsy, or renting out a room on Airbnb, the extra income counts as self-employed earnings.  

This means you might need to declare it to His Majesty’s Revenue and Customs (HMRC), even if it’s just a small side hustle.  

Trading allowance  

However, the government’s trading allowance allows you to earn up to £1,000 tax-free from casual or miscellaneous income, like gardening or babysitting.  

If you earn more than £1,000 though, you must file a self-assessment return. Even if you earn less, check your situation. Other income might push you above the threshold, requiring a return. 

Income from a lodger 

The rent-a-room scheme lets you earn up to £7,500 tax-free from renting out a room in your home.  

If you exceed this threshold, you must file a tax return and pay tax on the extra income. Earnings under £7,500 are automatically exempt from tax. 

State pension 

State pension income must be declared in a self-assessment, along with other pension income.  

If the state pension is your only income and it’s below the personal allowance (£12,570), you don’t need to file. But if you have additional income, you’ll need to declare it. 

Interest on savings  

Interest from savings is taxable income. The personal savings allowance (PSA) lets you earn up to £1,000 tax-free (depending on your income tax band). If your total interest exceeds the allowance, you must file a self-assessment return.  

Higher-rate taxpayers have a £500 allowance and additional-rate taxpayers have no PSA. Savings income over £10,000 must always be reported, regardless of other income. 

Tax relief on pension contributions is available up to £60,000 or 100% of your income (whichever is lower). Going over this limit results in an annual allowance charge, which is added to your taxable income. If this applies, file a self-assessment to report the excess and calculate how much tax you owe.  

Child benefit 

If you or your partner earn over £50,000 and receive child benefit, you must pay tax on the benefit through self-assessment. For every £100 earned above £50,000, 1% of the child benefit must be repaid. If your income reaches £60,000, the full benefit is lost. 

Still unsure? 

If you’re not sure whether you need to file, use HMRC’s online tool or contact them directly for advice.  

It’s better to be sure than risk missing the deadline. 

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