In the UK, whether or not you need to file a self-assessment tax return depends on several factors, regardless of your profit status. If you are self-employed, you generally need to register for self-assessment and complete a tax return if your business income exceeds the trading allowance of £1,000, even if that income does not result in a profit. Other reasons you might need to submit a tax return include being a company director, having income over £100,000, receiving rental income, or earning income from abroad.
Even if your income is below your personal allowance and you have not made a profit, it’s often still advisable to file a tax return if you are eligible, to formally record losses. This can be beneficial because the recorded losses can sometimes be offset against future profits, potentially reducing future tax liabilities.
Moreover, failing to submit a tax return when you are required to do so could result in penalties from HMRC, irrespective of your profit status. If you are unsure whether you need to file, it’s always a wise step to use the HMRC’s self-assessment checker tool or consult with a tax professional to ensure compliance with UK tax laws.