What is Self Assessment?
Self Assessment is the system HMRC uses to collect income tax from people whose income is not taxed at source. Here is what it means and how it works.
In one sentence
Self Assessment is the way HMRC collects income tax from people whose tax cannot be deducted automatically through PAYE.
Quick answer
- Self Assessment is HMRC's system for collecting Income Tax on income that is not taxed at source
- You file a tax return after the tax year ends (6 April to 5 April) and HMRC works out what you owe
- For 2025/26 the online return and payment deadline is 31 January 2027
- It applies if you are self-employed, a landlord, a partner, have untaxed income or pay Capital Gains Tax
- Most employees do not need to file because PAYE takes tax automatically
Steps
- 1Register with HMRC for Self Assessment if you have not before
- 2Get your Unique Taxpayer Reference (UTR), which arrives by post and also appears in your HMRC online account and the HMRC app
- 3Set up your Government Gateway account
- 4Gather your income and expense records for the tax year
- 5Complete and submit your tax return online
- 6Pay any tax owed by the deadline
What is Self Assessment?
Self Assessment is the system HM Revenue and Customs (HMRC) uses to collect Income Tax from people whose income is not taxed automatically. You report your income for the tax year on a Self Assessment tax return, and HMRC's online service works out the Income Tax and National Insurance you owe. You then pay the bill, usually by 31 January. The tax year runs from 6 April to 5 April.
Most employees never need to do this. Their employer takes tax and National Insurance off their pay through PAYE. Self Assessment is for income that arrives without tax deducted, such as profits from self-employment, rent from a property, dividends from your own company or gains from selling assets. It replaced the old Inland Revenue assessments from the 1996 to 1997 tax year.
In short: self assessment in taxation means you assess and report your own tax position. It is not a type of accounting, although accountants prepare the figures. You can send the return yourself or ask an accountant to do it.
| Term | What it means |
|---|---|
| Self Assessment | The HMRC system for collecting Income Tax on untaxed income |
| Tax return (SA100) | The yearly form you complete within that system. Extra pages cover self-employment, property and other income |
| UTR | Your 10-digit Unique Taxpayer Reference, needed to file |
| Tax calculation (SA302) | HMRC's calculation of how your bill was worked out |
| Payments on account | Two advance payments towards next year's bill, due 31 January and 31 July |
Self Assessment key dates
| For the 2025/26 tax year | Date |
|---|---|
| Register for Self Assessment (first-time filers) | 5 October 2026 |
| Paper tax return must reach HMRC | 31 October 2026 |
| Online tax return, and tax owed, due | 31 January 2027 |
| Second payment on account (for the following year) | 31 July 2027 |
See our full guide to Self Assessment deadlines for 2026/27 for tax year dates, payments on account and capital gains dates.
The Self Assessment tax year
The UK tax year runs from 6 April to 5 April the following year. So the 2025/26 tax year covers income earned between 6 April 2025 and 5 April 2026.
Your tax return for the 2025/26 tax year is due online by 31 January 2027, and any tax you owe must be paid by the same date.
Who has to send a Self Assessment tax return?
You must send a return for a tax year (6 April to 5 April) if any of these applied:
- You were self-employed as a sole trader and earned more than £1,000 (before deducting anything you can claim tax relief on)
- You were a partner in a business partnership
- You paid Capital Gains Tax on selling or disposing of something that increased in value
- You had to pay the High Income Child Benefit Charge and do not pay it through PAYE
- You are an off-payroll worker repaying a student or postgraduate loan
You may also need to send one if you have untaxed income, such as money from renting out property or land, tips and commission, savings interest, dividends or foreign income. You can also choose to send a return, for example to prove you are self-employed when claiming Tax-Free Childcare or Maternity Allowance. If you are not sure, use HMRC's check tool, or read our guide on who needs to file Self Assessment.
If you think you no longer need to send a return, for example because you have stopped being self-employed, tell HMRC as soon as possible. HMRC needs time to review your request before the 31 January deadline, and you may get a penalty if you tell them too late.
What you report on a Self Assessment
- Self employment income and business expenses
- Rental income from UK or overseas property
- Dividends from companies, including your own limited company
- Interest from savings (above your Personal Savings Allowance)
- Capital gains from selling assets
- Foreign income
- Pension contributions and charitable donations (for tax relief)
How tax is calculated
HMRC adds up all your income, deducts your Personal Allowance (the amount you can earn tax free), and applies the relevant tax bands. The same Self Assessment also calculates Class 4 National Insurance if you are self employed.
If your tax bill is more than £1,000 and most of your income is not taxed at source, you may also have to make payments on account towards next year's bill.
Worked example: a sole trader with £30,000 profit
Alex is self-employed and made a £30,000 profit. These figures use the 2026/27 rates, which are the same as 2025/26 for the Personal Allowance, the basic rate band and Class 4 National Insurance.
| Step | Amount |
|---|---|
| Profit | £30,000 |
| Less Personal Allowance | £12,570 |
| Taxable income | £17,430 |
| Income Tax at 20% | £3,486.00 |
| Class 4 National Insurance at 6% on £17,430 | £1,045.80 |
| Total bill | £4,531.80 |
Because the bill is over £1,000, Alex also makes payments on account of half the bill (£2,265.90) on 31 January and 31 July. In the first year, the January payment is the full £4,531.80 plus the first payment on account: £6,797.70. Class 2 National Insurance is not payable at these profits, because with profits of £7,105 or more it is treated as paid. Sources: GOV.UK self-employed National Insurance and payments on account.
Self Assessment for the self-employed, landlords and directors
- Self-employed: report income and expenses on the self-employment pages. See our guide to the Self Assessment service.
- Landlords: report rent on the UK property pages. Read the SA105 form guide.
- Company directors: you may need to report dividends and other untaxed income. See Self Assessment for directors.
- Employees: usually not needed unless you have other untaxed income. Check with do I need Self Assessment?
What happens after you file
You get an instant calculation of what you owe. You pay HMRC by bank transfer, Direct Debit, or debit card. HMRC can open a compliance check into your return, usually within 12 months of the date you file it.
You must keep your own records for at least 22 months from the end of the tax year (or 5 years and 10 months if you are self employed).
What happens if you miss the Self Assessment deadline?
You get a penalty for filing late and for paying late, and the two are separate. Late filing starts with an initial £100 penalty. After 3 months, daily penalties of £10 a day apply, up to £900. After 6 months there is a further penalty of 5% of the tax due or £300, whichever is greater, and the same again after 12 months. Paying late adds a penalty of 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest.
Registering late can bring a separate 'failure to notify' penalty. If you have a reasonable excuse you can appeal. See late filing penalties and Self Assessment deadlines for 2026/27, or estimate yours with HMRC's penalty estimator.
Summary
- Self Assessment is HMRC's system for taxing untaxed income
- You file once a year, by 31 January, for the tax year that ended the previous April
- It applies if you are self employed, a landlord, a director, a high earner, or have other reportable income
- You declare your income, claim deductions, and pay the tax owed
- Missing the deadline brings a £100 penalty for a late return plus separate late payment penalties
Frequently asked questions
What does it mean to self assess your tax?
It means you work out and report your own taxable income to HMRC on a tax return, instead of having tax taken off automatically by an employer or pension provider. HMRC's online service then calculates the tax and National Insurance due, and you pay it by the deadline.
Is HMRC Self Assessment the same as Inland Revenue self assessment?
Yes. Self Assessment started in the 1996 to 1997 tax year, when income tax was run by the Inland Revenue. The Inland Revenue merged with HM Customs and Excise in 2005 to form HM Revenue and Customs (HMRC), which runs the same system today.
Do I need to do Self Assessment if I am employed?
Usually not, if all your income is taxed through PAYE. You may need to if you also have untaxed income, such as self employed income over the £1,000 trading allowance or rental income above £2,500 after expenses. HMRC's online checker confirms it for your situation.
What is a Self Assessment statement?
A Self Assessment statement is HMRC's account summary for your Self Assessment. It shows the tax charged, payments you have made, any payments on account due and the balance you owe or are owed. You can see it in your HMRC online account, and HMRC may also post one to you. It is different from the tax calculation (SA302), which shows how your tax bill for a year was worked out.
When is the Self Assessment deadline?
For the 2025/26 tax year, paper returns are due by 31 October 2026 and online returns by 31 January 2027. Any tax owed must also be paid by 31 January 2027. You must register by 5 October 2026 if you have not filed before.
What is the difference between Self Assessment and a tax return?
Self Assessment is the system HMRC uses to collect Income Tax from income that is not taxed automatically. The tax return is the form you complete each year within that system. The main form is the SA100, with extra pages for self-employment, property and other income. You send the return and HMRC calculates what you owe.
Does Making Tax Digital replace Self Assessment?
No. Making Tax Digital for Income Tax changes how sole traders and landlords keep records and report to HMRC during the year. It started on 6 April 2026 for those with qualifying income over £50,000 in 2024/25. GOV.UK says you still submit a Self Assessment tax return for the tax year before you start using it, and exempt taxpayers continue to file one.
What are the penalties for missing the Self Assessment deadline?
Late filing starts at £100, with daily penalties of £10 from 3 months up to £900, then 5% of the tax due or £300, whichever is greater, at 6 and 12 months. Late payment adds 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest. You can appeal if you have a reasonable excuse.
How do I check if I need to do Self Assessment?
Use HMRC's online check, or look at the list of triggers: self-employment income over £1,000, a partnership, Capital Gains Tax, the High Income Child Benefit Charge, or untaxed income such as rent, dividends, savings interest or foreign income. Employment income taxed through PAYE alone does not usually need one.
What is a Self Assessment tax return?
A Self Assessment tax return is the yearly form you send HMRC to report your income, claim allowances and reliefs, and work out the Income Tax and National Insurance you owe for the tax year. The main form is the SA100, with extra pages for self-employment, property, and other income. You can file online or on paper.
Is Self Assessment accounting?
No. Self Assessment is a tax reporting system, not a type of accounting. You still need records of income and expenses to complete the return, and many people use an accountant or bookkeeping software to prepare the figures.
Who has to do Self Assessment if they are self-employed?
If you were self-employed as a sole trader and earned more than £1,000 before expenses in the tax year, you must send a tax return. You must register by 5 October after the tax year in which you started, and then file and pay by 31 January. If you earned £1,000 or less you may not need to file, but you can still choose to.
How much tax do you pay under Self Assessment?
It depends on your income. For 2026/27 in England, Wales and Northern Ireland you pay no Income Tax on the first £12,570 (the Personal Allowance, reduced above £100,000), then 20% up to £50,270, 40% to £125,140 and 45% above. Self-employed people also pay Class 4 National Insurance of 6% on profits between £12,570 and £50,270 and 2% above. Scotland has different Income Tax bands.
Key terms
- Self Assessment
- The HMRC system for collecting income tax from individuals whose tax is not deducted automatically. You report your income, claim allowances, and pay any tax owed each year.
- PAYE
- Pay As You Earn, the way employers deduct income tax and National Insurance from salaries before paying employees. Most employees do not need to file Self Assessment.
- UTR
- Unique Taxpayer Reference, a 10-digit number HMRC gives you when you register for Self Assessment. You need it every time you file.
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