Self Assessment
The system by which individuals report their own income, gains, and reliefs to HMRC each year through an online or paper tax return, rather than having tax collected automatically under PAYE. You must register for Self Assessment if you are self-employed and earned more than £1,000, are a partner in a business partnership, owe Capital Gains Tax, owe the High Income Child Benefit Charge and don't pay it through PAYE, or have other untaxed income such as rental profits, tips, commission, or savings and investment income above your allowances. The annual deadline for online returns is 31 January following the end of the tax year.
How it works
When you register, HMRC issues you a Unique Taxpayer Reference, which you use every year afterward to log in and file, even if your circumstances change. If you stop needing to file — for example, you stop being self-employed — you must formally tell HMRC to deregister rather than simply not submitting a return, otherwise penalties can still apply.
Many self-employed and higher-earning taxpayers also make payments on account — two advance instalments toward the following year's tax bill, each based on half of the prior year's liability, on top of that year's balancing payment.
Because Self Assessment relies on your own figures, you're expected to keep supporting records — invoices, receipts, and bank statements — in case HMRC opens a compliance check into your return after it's filed.
Example: how payments on account work
Your tax bill for 2025-26, entirely from self-employment profits with no tax deducted at source, comes to £4,000.
HMRC then requires two advance payments on account toward your 2026-27 bill, each equal to half of the prior year's liability — £2,000 apiece.
The first instalment is due alongside your balancing payment by the 31 January deadline, so your January bill totals £4,000 + £2,000 = £6,000, with the second £2,000 instalment due later in the year.
Frequently asked questions
What if I no longer need to file Self Assessment?
You must formally tell HMRC to deregister rather than simply stopping — if HMRC still expects a return and doesn't hear from you, penalties can apply even where no tax is actually owed.
Can I correct a Self Assessment return after submitting it?
Yes, online returns can generally be amended for around a year after the filing deadline; corrections needed outside that window require contacting HMRC directly.
Do I need to keep records after I've filed?
Yes, you should retain invoices, receipts, and bank statements supporting your figures in case HMRC opens a compliance check into your return.
Related Terms
PAYE
Pay As You Earn — the system by which employers deduct income tax and National Insurance directly from employees' wages before paying them, and remit the deductions to HMRC on their behalf.
HMRC
His Majesty's Revenue and Customs, the UK government department responsible for collecting taxes, paying certain forms of state support, and enforcing tax law.
Tax Year
The 12-month period used for UK tax purposes, running from 6 April to the following 5 April.
Class 2 National Insurance
A flat-rate National Insurance contribution historically paid by self-employed people to build entitlement to the State Pension and other contributory benefits.
Class 4 National Insurance
National Insurance paid by self-employed individuals on their taxable profits, calculated as part of their Self Assessment tax return.
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Use our free tool to see how self assessment affects your tax.