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.