If you use an umbrella company, you may still be required by law to complete and submit a self-assessment tax return. Continue reading as we answer: “Do I need to submit a self-assessment tax return if I use an umbrella company?”.
Under what circumstances do I not need to submit a self-assessment tax return if I use an umbrella company?
If you use an umbrella company, you might wonder if the salary you are paid via the umbrella company qualifies as income you must report on your self-assessment tax return. Pay As You Earn (PAYE) is how the government deducts national insurance and taxes from your wages. This means (providing you use a compliant umbrella company) every time the umbrella company pays you, they will automatically deduct the right amount of tax and National Insurance and pay this to HMRC on your behalf. If your only income is paid via PAYE and you are below the self-assessment threshold (£150,000 before tax), you will not likely need to file a tax return.
Under what circumstances do I need to submit a self-assessment tax return if I use an umbrella company?
In some circumstances, you may be required to submit a self-assessment tax return if you use an umbrella company. For example, if any of the following apply:
- You had a total taxable income of £150,000 or more
- You were self-employed as a sole trader and earned more than £1,000 (before deducting anything you can claim tax relief on)
- You receive money or income from renting out a property
- You received foreign income
- You are the director of a limited company and get paid via dividends
- You have to pay the High Income Child Benefit Charge
- You were a partner in a business partnership
- You received tips or commission
- You are a higher or additional rate taxpayer and make contributions to a pension scheme
- You received income from investments, dividends or savings
- You receive any form of untaxed income specified by HMRC, capital gains or losses
If you are unsure if you need to submit a self-assessment tax return, the government’s website has a useful online tool to check if you need to send a tax return.
Contact our in-house Personal Tax Department
Churchill Knight Umbrella has an expert in-house personal tax department that can help contractors and freelancers file their self-assessment tax returns to HMRC accurately and on time.
If you are an existing employee of Churchill Knight Umbrella or a contractor that has additional income, there are many benefits of appointing Churchill Knight Umbrella to complete your tax return:
- Completion and submission of your tax return to HMRC
- Continuous help and support from Churchill Knight Umbrella’s expert team
- They’ll advise you of your tax liability or if you are due a refund
- Advice on ways to legally reduce your tax liability
To find out more about our tax return service or to appoint Churchill Knight Umbrella to complete your self-assessment tax return, give our expert team a call at 01707 871622.
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