Self-assessment: What to know now
The deadline for submitting your self-assessment tax return has passed for another year but if it was a race to the finish line, you may have decided that you don’t want to be up against it again next year. You can get super organised now by putting 31 January 2024 in your diary as that’s when you’ll next need to file online and pay any tax you owe by midnight. You could face a penalty if your return or payment is late.
Read on to find out more general information about the self-assessment system, including whether you need to file a tax return and how you can fill one in online.
What is self-assessment?
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, you are required to file a tax return, which lists everything you’ve earned over the previous 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 2022 to 5 April 2023), 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
- earning income of £100,000 or more
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 and pay the High Income Child Benefit Charge.
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 re-register using form CWF1 online.
You should be sent a Unique Taxpayer Reference (UTR) within 10 days of registering if you’re completely new to self-assessment, which you will need to complete your tax return. You may be able to find it sooner in your personal tax account, or on the HMRC app.
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 2022 – 5 April 2023) must be submitted by 31 January 2024. 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. You can find a list of ‘reasonable excuses’ on the HMRC website.
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.
Dive even deeper
The government’s Childcare Choices scheme is expanding, so more families stand to benefit from 15 or 30 hours funded childcare. But accessing what you’re entitled to isn’t always straightforward. We explain how to claim what you’re eligible for.
National Insurance contributions for employees are being cut from 6 January 2024, while cuts to National Insurance rates for self-employed workers will follow in April. Find out how this applies to you, and what difference it could make to your take-home pay.