What Is Self-Assessment Tax?

Self-assessment is a process HMRC uses to collect income tax. Tax is usually deducted automatically from wages, pensions and savings but individuals and businesses earning other incomes must report them in a self-assessment tax return.

You are required by law to complete a self-assessment tax return if you receive income from any of the following:

  • Self-employed/sole trader earnings of over £1,000
  • Business partnerships
  • Income of over £100,000
  • Rental income
  • Savings and investments
  • Dividends
  • Trusts
  • Living abroad with any UK income
  • High-income child benefit tax charge

You do not need to complete a return if your only income comes from wages or pensions however you do if you are already registered for self-assessment. The only exception being if your income is above £100,000.

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How Does Self-Assessment Tax Work?

HMRC will calculate the amount of tax you owe based on your tax return. How much you pay will depend on the income tax band you’re in. There are different ways to register based on whether you are an individual, self-employed, a partner in a partnership or a company director.

When Is The Self-Assessment Tax Deadline?

HMRC must receive your self-assessment tax return and the money owed by the 31st January following the end of the tax year on the 5th April. There are penalties for the late filing of the tax returns but you can appeal these if you have a valid excuse such as a serious or life threatening illness or delays which are beyond your control.

Usually, if your tax bill is more than £1,000 for the year, two payments on account are required towards the current year’s a tax bill. The first payment is due on the 31st January at the same time as the previous year’s tax bill, and a second payment is due on the 31st July. This will reduce the amount you owe in the following January.

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Our Self Assessment Services

We will ensure that your self-assessment tax return is filed on time provided that all of your information has been provided to us at a starting price of £130+VAT depending on the complexity of the tax return.

If however we believe that our fees will exceed those originally quoted after our initial review then we will inform you of this at the earliest opportunity and our fees would be fully refundable should you not wish to continue with the service.

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