What Is Self Assessment?

Self Assessment is a system used by tax authorities (such as HM Revenue & Customs in the UK) to collect Income Tax. Instead of tax being automatically deducted, individuals and businesses report their own income and expenses and calculate how much tax they owe by submitting a Self Assessment tax return each year.

Who Needs to Use Self Assessment?

You usually need to file a Self Assessment tax return if you:

  • Are self-employed or a sole trader

  • Are a partner in a business partnership

  • Earn income from freelancing or contracting

  • Receive rental income from property

  • Earn income from investments, dividends, or savings

  • Have foreign income

  • Are a company director (unless all income is taxed through PAYE)

  • Earn over a certain threshold not taxed automatically

  • Have capital gains to report

  • Receive income where tax has not been deducted at source

HMRC may also notify you directly if they require you to submit a return.

When Do You Need to Register and File?

Registering for Self Assessment

  • You must register by 5 October following the end of the tax year in which you first need to file.

  • The UK tax year runs from 6 April to 5 April.

Filing Your Tax Return

  • Paper return deadline: 31 October

  • Online return deadline: 31 January

Both deadlines are after the end of the tax year.

Paying Your Tax

  • Tax payment is due by 31 January

  • If applicable, a payment on account may also be due by 31 July

Why Is Self Assessment Important?

  • Ensures you pay the correct amount of tax

  • Helps avoid penalties and interest

  • Keeps you compliant with HMRC regulations

  • Allows you to claim allowable expenses and tax reliefs

What Happens If You Don’t File on Time?

Late filing can result in:

  • An automatic £100 penalty

  • Additional daily penalties after 3 months

  • Interest on late payments

  • Further fines if delays continue

Final Thoughts

Self Assessment gives individuals and businesses responsibility for reporting their income accurately and paying the correct tax. If you think you may need to file, it’s important to register early, keep good financial records, and meet all deadlines.