What is Self Assessment?
Self Assessment is HMRC's system for collecting income tax and National Insurance from people whose income is not fully taxed at source, using an annual tax return.
What Self Assessment means
Most employees have tax taken through PAYE and never file a return. Self Assessment is for everyone else whose tax cannot be collected that way. You usually need to file if you are:
- a sole trader with self-employed income over £1,000
- a partner in a business partnership
- a landlord with rental income
- receiving untaxed income, such as dividends over £10,000 or large amounts of savings interest
- selling assets with Capital Gains Tax to pay
Example
Someone who starts freelancing in June 2026 falls into the 2026/27 tax year.
| Deadline | What happens |
|---|---|
| 5 October 2027 | Register for Self Assessment and get a UTR |
| 31 October 2027 | Paper return due, if filing on paper |
| 31 January 2028 | Online return due and tax paid, plus the first payment on account if one applies |
| 31 July 2028 | Second payment on account |
What the return covers
The return reports all your taxable income for the year, not just the part that has not been taxed. Employment income already taxed through PAYE is included so HMRC can work out the right band for everything else. You also claim reliefs on it, such as pension contributions and Gift Aid, which can reduce higher rate tax.
Once registered, you receive a UTR number and HMRC will expect a return every year until you tell it you no longer need to file. If your tax bill is over £1,000, you will usually also make payments on account towards the following year.
Why it matters
Missing the filing deadline brings an immediate £100 penalty, even if no tax is owed, with daily penalties after three months and further charges after six and twelve months. Late payment carries interest and its own penalties. Our guides explain how to register for Self Assessment and how to sign in to your HMRC account.
Common questions
Usually not. If your only income is a salary or pension taxed through PAYE, and you have no untaxed income or gains to report, HMRC will not normally expect a return. You might still choose to file to claim tax relief, such as higher rate relief on pension contributions.
Not automatically. Many directors do, because they receive dividends or other untaxed income, or HMRC has asked them to. If HMRC sends you a notice to file, you must file, even if you think no tax is due.