Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.

Tax is usually deducted automatically from wages, pensions and savings. People and businesses with other income must report it in a tax return.

You must send a tax return if, in the last tax year (6 April to 5 April), you were:

• self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on); or

• a partner in a business partnership

You will not usually need to send a return if your only income is from your wages or pension. But you may need to send one if you have any other untaxed income, such as:

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• Money from renting out a property

• Tips and commission

• Income from savings, investments and dividends

• Foreign income

 

If you need to send one, it must be completed and submitted after the end of the tax year (5 April) it applies to.

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When you complete a self-assessment, you need to report all of your personal earnings for the relevant tax year and return it by the 31st of January. If you miss this deadline you will receive a late penalty of £100 and more penalties if you wait any longer afterwards.