According to the UK’s taxation laws, a person who was unemployed for the most part of a tax year can also file a self-assessment tax return, but it depends on his age, filing status, and income. If your income is above the threshold, even when you are unemployed, HMRC requires filing a tax return. It one should also file return in order to take advantage of unemployment allowances and other immunities from the government.
Reasons to file a tax return while being unemployed:
Being a jobless individual, you have to report your income to HMRC for the below reasons and benefits.
Pensions above the specified limit:
Under the taxation laws, set by the HMRC, no benefit from the government is tax-free for the citizens. Citizens are obliged to pay tax and file return; consequently, if their incomes from benefits like pensions or other benefits from the government are above the threshold of the personal allowance, just 25% is tax-free. On the other hand, 75% of your income is taxable. For example, if your income from pensions is £60,000 annually, you are required to pay tax on the £45,000 according to the tax rate set by the HMRC.
Pay tax on expenses above £2500:
Under the tax regulations implemented in the country, one is also obliged to pay income tax if his annual expenses reach £2500 annually. HMRC has no concern with if you are employed or not, if your income meets the criteria set by HMRC, you are required to pay tax and file a personal tax return.
To claim child benefits:
According to the laws in the UK, it is essential to report your income and other related details to HMRC in order to claim child benefit that hugely depends on the child benefit charge paid to HMRC through your self-assessment tax return. Even if you are unemployed and your or your partner’s income gets over the threshold of £50000, you are bound to pay tax and file a return accordingly. Failing to pay tax as a child benefit charge can result in dismissal of your benefits from the government and even result in legal consequences.
To claim job seekers allowance
For an unemployed person, it is essential to file a tax return to HMRC in order to claim job seekers allowance. Being an unemployed citizen and claiming your job seekers allowance, it is essential to inform HMRC through your personal tax return to take advantage of your paid taxes previously. According to the national laws about job seeker's allowance, without informing about your employment status and income, one cannot enjoy the benefits from the government.
To claim marriage allowances
You can also claim for the marriage allowances from the HMRC, in case if you were paying taxes on your income in previous years, and still, you are required to inform HMRC through your income tax returns and to provide HMRC the reasons for claiming such benefits.
From the entire discussion, one can conclude that in the UK even a person without any job or business is also required to file tax return to HMRC, not only to comply with the legal requirements but also to take advantage of all benefits that an unemployed person can enjoy according to the regulations implemented in the country regarding taxes and returns. If you are the one unemployed person, you can also file a tax return to HMRC to make it aware of your financial conditions and claim advantages like child benefits, job seekers allowances, marriage allowances, and other tax refunding opportunities.
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