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.
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.