Self Assessment Explained
The system HMRC uses to collect tax on income that is not deducted at source. If you are self-employed, a landlord, or have other untaxed income, you likely need to file a Self Assessment tax return.
What is Self Assessment?
Self Assessment is the process of reporting your income and calculating the tax you owe by filing a tax return with HMRC. It covers any income not already taxed through PAYE, such as profits from self-employment, rental income, dividends, capital gains and foreign income.
Around 12.1 million people file Self Assessment returns in the UK each year. The system runs on a tax year basis (6 April to 5 April).
How it works
First, you register with HMRC for Self Assessment if you have not already. You then file a return by the deadline. Key dates for the 2025-26 tax year:
| Deadline | Action |
|---|---|
| 5 October 2026 | Register for Self Assessment if new |
| 31 October 2026 | Paper return deadline |
| 31 January 2027 | Online return deadline and payment due |
| 31 July 2027 | Second payment on account towards 2026-27 (if applicable) |
Late filing attracts an automatic £100 penalty, even if there is no tax to pay. After 3 months, daily penalties of £10 apply for up to 90 days. After 6 and 12 months, further penalties are charged based on the tax owed.
Real example
Kate works full-time earning £40,000 (taxed through PAYE) and runs a freelance business on the side making £8,000 profit. She must file a Self Assessment return because her self-employment income exceeds £1,000 (the trading allowance).
On her return, she reports both the £40,000 employment income (tax already paid) and the £8,000 self-employment profit. Her employment income uses £27,430 of the £37,700 basic rate band, so the £8,000 falls within the 20% basic rate band. She owes an extra £1,600 in Income Tax. There is no Class 4 NI because her profit is below the £12,570 lower profits limit.
Who does this affect?
You must file a Self Assessment return if you are self-employed with income over £1,000, or a partner in a business partnership. Other triggers include untaxed income from rental property, savings interest above your allowance, dividends above £500, capital gains above the annual exemption, or if HMRC has asked you to file.
HMRC source
gov.uk/self-assessment-tax-returns has the full guide to registering, filing and paying your Self Assessment tax.
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