Who pays self-assessment tax?
Self-assessment is used to collect tax from the self-employed, paying income tax on their profits. It is also used if you’re a business partner or a director of a limited company. You'll also need to fill in a tax return if:
- you're an employee or pensioner with an annual income of £100,000 or more
- you're self-employed, a business partner, or director of a limited company
- you have a pre-tax investment income of £10,000 or more
- your income (or your partner's) was over £50,000 and one of you claimed Child Benefit
- you had income from abroad that you need to pay tax on
- you were trustee of a trust or a registered pension scheme
- you received a P800 form from HMRC saying you didn't pay enough tax last year - and you didn't pay what you owe through your tax code or with a voluntary payment
- you're a 'name' at the Lloyd's of London insurance market
- you're a minister of religion
- you're a trustee or representative of someone who has died.
You'll usually also be sent a tax return if:
- you have untaxed income – from investment, land or property, or from overseas
- you make capital gains above the annual exempt amount (£11,300 for 2017-18)
- you were required to fill in a tax return last year
- you're a pensioner who gets reduced age-related allowance, though you may be sent a special short version that requires fewer details.
If any of the circumstances above apply to you, do not wait to see if HMRC contact you - the onus is on you to declare your earnings and submit your tax return.
Use the Which? online tax calculator: our easy-to-use and jargon-free tax calculator offers personalised tax tips, and you can submit the form directly to HMRC. In our video, we explain how to use the Which? tax calculator - tot up your tax bill and submit your return direct to HMRC.
What's the difference between PAYE and self-assessment?
PAYE is a method of paying income tax each month, usually taken from your monthly salary. You can see your PAYE contributions on your payslip.
If you think you might be paying too much in PAYE, check your tax code.
It is possible to pay tax via PAYE and also need to complete a self-assessment tax return. This is common if you receive a private pension and also if you receive investment income.
If you are an employee but also self-employed (running a business part-time, for instance) you might also be required make a self-assessment tax return.
As part of the assessment, you will be expected to show details of your employment, earnings and tax deducted via PAYE.
Help with self-assessment
The UK tax system can be difficult to navigate, so we've rounded up commonly asked questions about filing your self-assessment tax return.
When do I have to submit my tax return?
Paper tax returns for the 2017-18 tax year must be submitted by 31 October 2018.
Online tax returns for 2017-18 must be submitted by 31 January 2019.
You could face a penalty if you file your tax return late without a valid excuse.
Where can I request a self-assessment tax form?
How do I submit my self-assessment tax return?
If you’re submitting your tax return online, you can use the Which? tax calculator. Tot up your tax and the form will be submitted straight to HMRC.
Alternatively, you can submit your return via the HMRC website. See our guide to online tax returns for more details on how to do this.
You can also submit a paper tax return – for this, you’ll need to post your return.
You can find HMRC's address on your forms and any other correspondence.
How do I pay my tax return?
You can pay via online or telephone banking, CHAPS, debit card online, at your bank or building society, Bacs, Direct Debit or cheque through the post.
You can no longer pay HMRC at the Post Office or via credit card.
Can I pay my tax return by credit card?
No. As of January 2018, HMRC stopped accepting tax return payments by credit card.
How can I check if my self-assessment tax return payment has been received?
You can view your HMRC online account to check if your payment has been received – it should show as ‘paid’ three to six working days after you made the payment.
If you paid by post, you can include a letter with your payment asking for a receipt from HMRC. They should send this back to you by post.
What if I can’t pay my self-assessment tax bill?
If you’re struggling to pay your tax bill, contact HMRC and make a ‘payment proposal’ – an alternative way of paying your bill, either through monthly or quarterly payments.
HMRC will consider this proposal, and may ask for more information about other assets you have, such as savings and investments, before accepting the offer.
How long should I keep my tax return documents for?
If you're self-employed, you must keep accounts and records of your business dealings for at least five years following the relevant tax year. So, for 2017-18, records must be kept until 31 January 2024 or you could be fined £3,000.
But keep in mind that 20 years is the time limit for an HMRC investigation if it suspects fraud, so it may make sense to keep longer-term records as well.
What if the estimate for my next year’s income is incorrect?
Those with business or property income must make payments on account. Your tax bill is then settled the following January (ie January 2019 for the 2017-18 tax year).
If you have overpaid, you’ll get a refund plus interest. If you’ve underpaid, you’ll have to pay extra.
Find out more: Paying tax: self-employed - our guide explains about making payments on account.
What if I spot mistakes on my tax return?
If the error is down to HM Revenue and Customs, you can generally claim a full rebate for the money lost.
Complain to the person dealing with your case. If you're unhappy with the response, put a complaint in writing to the customer relations or complaints manager.
You can also refer your complaint to the tax office director, before asking the independent adjudicator to look at it.
If you've paid too much tax because of your own mistake – such as not claiming an allowance you're entitled to – you can correct your tax return within the first year of filing it.
You can also reclaim overpayments within four years of the end of the tax year for which you're claiming.
Find out more: Late tax returns and penalties for mistakes - our list of errors to avoid