Glossary · UK
What is Self Assessment?
The HMRC system used to report income and calculate tax owed for people whose tax is not collected automatically through PAYE, such as the self-employed, landlords and higher earners.
Full Definition
Self Assessment is the system HMRC uses to collect Income Tax from people whose income is not taxed automatically at source through PAYE. Anyone who is self-employed as a sole trader, a partner in a business partnership, a company director without a salary taxed fully under PAYE, a landlord with rental income, or someone with untaxed income such as savings interest, dividends or capital gains above the relevant allowances, is generally required to register for Self Assessment and file an annual tax return. The tax year runs from 6 April to 5 April, and the online filing deadline is 31 January following the end of the tax year (31 October for paper returns), with the balance of tax due on the same 31 January date, alongside any first Payment on Account for the following year. Failure to register, file, or pay on time triggers automatic penalties: a £100 fixed penalty for a return filed even one day late, escalating daily and further penalties at 6 and 12 months, plus interest and late-payment penalties on unpaid tax. From 2026, HMRC is phasing in Making Tax Digital for Income Tax, which will require many self-employed people and landlords with qualifying income above set thresholds to keep digital records and submit quarterly updates rather than a single annual return, alongside a new points-based penalty system for late submissions.