Self-Assessment Tax Return: Who Has to Complete One
Self-employed workers, or those with additional income streams, must pay income tax by filing a self-assessment tax return. We explain what self-assessment is, who should pay tax this way, and how to do it.
Self-employed workers, or those with additional income streams, must pay income tax by filing a self-assessment tax return.
If you are employed by a business, tax is automatically taken from your wages, but if you’re self-employed, or earn money in another way — for example, by renting out a property — you will have to pay your tax through the self-assessment system.
When your self-assessment tax return is completed, you must pay the tax you owe to HM Revenue and Customs (HMRC). This is different to the Pay As You Earn (PAYE) system, where taxes are automatically deducted by an employer before you receive your salary.
In this article, we explain what self-assessment is, who should pay it, and how to pay it.
How does self-assessment work?
If you’re self-employed, you’ll usually be paid throughout the year, but tax and National Insurance (NI) contributions will not automatically be taken off.
Therefore, at the end of the tax year, you are required to file a tax return, which lists everything you’ve earned over that tax year, plus any expenses you can claim, and how much tax and National Insurance you have to pay. You must then make the payment online, at your bank, via direct debit, by cheque or as a bank transfer to HMRC before the end-of-tax-year deadline.
In some cases, even if you aren’t self-employed, you may have to file a self-assessment return if you earn money through another income stream.
You can check whether you need to submit a return here.
Who has to complete a self-assessment return?
You will need to send a tax return if, for the last tax year (6 April 2021 to 5 April 2022), you were:
- self-employed as a sole trader and earned more than £1,000
- a partner in a business partnership
- earning an income from renting out a property
- being paid an income from savings, investments and dividends
- earning foreign income
You may also need to file a return if you are eligible for tax relief on:
- charity donations
- pension contributions
- maintenance payments
- Covid-19 payments – check Gov.uk for more information
Additionally, if you claim Child Benefit as a high earner (with a salary over £50,000), you may have to send in a tax return.
If you think you may fall into any of these categories but aren’t sure, it is worth checking. Failing to pay tax on money earned in any of these ways could lead to paying a penalty, as well as interest on the money you owe.
How to register for self-assessment
You can register for self-assessment online on the government website, or by filling in a CWF1 form, printing it and posting it to HMRC.
How you register for self-assessment depends on:
- whether you are registering as self-employed
- as a partner or partnership
- are not self-employed
Each requires a different form – you can find out more here.
To file online, you will need to log in to your business tax account, or set one up.
If you have filed a self-assessment return before but did not submit one online last year, you will need to add a self-assessment return to your business tax account before you can file online.
You should be sent a Unique Taxpayer Reference (UTR) within 10 days of registering, which you will need to complete your self-assessment.
How to file your self-assessment return
You can file your return online or by post, and the deadlines are different for each. You will usually need to fill out an SA100 form.
If you have questions about your return, or you need help filling it in, you can contact HMRC by:
- calling the self-assessment helpline on 0300 200 3310
- using HMRC’s web chat facility
- sending a tweet to @HMRCcustomers
If you aren’t confident in filing your tax return yourself, or you don’t have the time, you can pay an accountant to do it for you. They can calculate how much tax and National Insurance you need to pay, and file the return for you. You may be able to deduct the fees you pay your accountant by claiming these as an allowable business expense on your tax return.
How and when to pay your self-assessment tax bill
The self-assessment deadlines are on the same dates each year.
- 5 October – deadline for registering for self-assessment
- 31 October – deadline to submit a paper tax return for the previous tax year
- 31 January – deadline for online returns and for paying the tax you owe (for the previous tax year)
This means that all tax returns for the last tax year (6 April 2021 - 5 April 2022) must be submitted by 31 January 2023. Any tax you owe must also be paid by this date.
If you miss the deadline for filing, there is usually an automatic £100 fine to pay, although you can appeal this in some circumstances.
Interest will build up on outstanding tax from 1 February. It is therefore best to file your return and pay your tax bill as soon as possible, to avoid any unexpected charges.
In some cases you may pay some tax in advance to cover the following year’s tax bill. This is called ‘payments on account’. You may need to make a payment by 31 July, unless your last self-assessment bill was less than £1,000, or you have already paid 80% of the tax you owe from the previous tax year. You can find out more about this on the Gov.uk website.
How do I unregister from self-assessment?
If you stop being self-employed, a business partnership is ending, or you want to stop for another valid reason, you need to notify HMRC and send a final tax return before the self-assessment deadline.
You can notify HMRC that you want to stop being self-employed or end your business partnership here.
Rebecca Goodman is a freelance journalist who has spent the past 10 years working across personal finance publications. Regularly writing for The Guardian, The Sun, The Telegraph, and The Independent. Read more
Kristina is a writer at NerdWallet. A recent graduate trading French for finance, she has experience creating content for student newspaper Cherwell and an edtech company. Read more