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What is Self-Assessment Tax in the UK?

If you’re not sure what Self-Assessment tax is, read our guide to the UK’s system and what you need to do to make the payments. We’ll also cover the UK self-assessment tax rates and how to pay it. And if you’re unsure about whether you’ll be liable for this tax, read our guide to paying self-assessment tax.


What Is Self-Assessment Tax?

People in the UK search for the phrase “What is self-assessment tax in Britain?” every month – a 23% increase on last year. A Chartered Accountancy firm, Sheards Accountants, answers six commonly asked questions about the UK tax system. When it comes to self-assessment, the deadline is usually the 31st of January or the 31st of July – and failing to pay your tax on time will result in penalty or interest.

It is crucial that you register with the HMRC before you can file your self-assessment tax return. The deadline for the 2020-21 tax year is 5th October, so it is important that you register by that date. However, once you have registered with HMRC, you will not have to register again. Moreover, you’ll receive an activation code in the post, which you’ll need to enter into your online account to begin filing your first self-assessment.


When You File Your Self-Assessment Tax Return?

When you file your self-assessment tax return, the government will determine the amount you owe and send you a tax bill. This bill can be accessed online via the government’s website, or you can choose to pay it by cheque or debit card. If you owe more than you owe, you’ll receive a penalty for filing late. But don’t worry – HMRC will refund any overpayments.

As a self-employed person, you may be wondering: what is self-assessment tax in the UK? This tax is paid when you are paid for your business throughout the year, but it is not automatically deducted. Self-employed people have to file a tax return at the end of the tax year listing all their earnings and expenses, along with the amount of tax owed. You have until the deadline to pay the self-assessment.


Who Is Self-Assessment Tax For?

If you are an individual, you may be wondering if you owe Self-Assessment tax. Unlike income tax, which must be paid on a quarterly basis, this tax is not assessed until you file your return for the previous year. Self-Assessment is the process of calculating your taxes for a given year. You must know that the personal allowance is an amount that you are allowed to keep. This allowance is worth PS12,570 in 2020-21, and PS12,570 in 2022-23.

If you miss the deadline for filing your self-assessment, you will be penalized by PS100. The penalties increase after three, six, and twelve months of failure. Furthermore, HMRC will charge you interest on any tax you haven’t paid by the deadline. It’s best to submit your Self-Assessment return as early as possible to avoid penalties.




What Are the Self-Assessment Tax Rates in the UK?

The UK’s tax authority, HM Revenue and Customs, levies taxes on income earned in the UK and worldwide by residents. This income can come from a variety of sources, including employment, benefits from a job, business profits, certain state benefits, and even rent. UK income tax rates are calculated on this total amount, after any deductions and credits. For individuals who earn income overseas, the UK tax rates may be higher than those paid in the UK.

If you earn more than PS10,000 per year, you must pay the HMRC at least PS1,000 in tax. If you earn less, you can choose not to pay any tax. If you earn more than PS10,000 per year, you’ll need to file a self-assessment tax return. The UK government is currently assessing how much tax you earn abroad, and you’ll have to pay that amount.


How to Pay Self-Assessment Tax?

To pay your Self Assessment tax bill, you can make payments through the Post Office, CHAPS, Bacs or HMRC Cumbernauld. You must enter the reference number, which is usually ten digits and starts with the letter ‘K’. You should also remember to enter the correct reference number as any gaps between characters can delay the update of your records. To pay by phone, you must call HMRC’s Customer Services line on 0161 667 8898 to find out the banking account number and branch.

When you complete your Self Assessment tax return, you will receive a bill indicating the amount of tax you have to pay. You must pay your bill by the deadline unless you are unable to complete it by this date. Afterwards, you will have to pay interest and penalties on the unpaid tax. If you have any doubts about your calculations, you should seek professional assistance. You should also pay your tax early to avoid penalties and interest.

Getting Help from a Tax Accountant

While you can complete your tax return by yourself, it may not be an easy task. For one, you might not know how to claim all of your expenses or how to take advantage of all the available tax reliefs. Therefore, it is important to get help from a qualified accountant to avoid any unnecessary mistakes and complications. You can also get help from an accountant when you make large purchases or incur expenses, which may not be deductible.

Moreover, the assistance of a tax accountant can help you save money. A good tax accountant should have indemnity insurance, a complaints process, and an easy payment plan. A good accountant should also be available at any time and be accessible to answer any questions you may have. Apart from that, a tax accountant should be experienced in the field of tax that you are in. Moreover, it should be easy to communicate with him/her.





The main purpose of self-assessment is to inform the HMRC of the earnings you have earned. Depending on your circumstances, you can choose to do it on your own or hire a tax accountant to do it for you. Hiring a professional may be the most beneficial option but it may not be the best use of your money. But it is important to remember that an accountant is more likely to minimize tax for you than a non-professional.

It is also advisable to hire an accountant if you are not accustomed to preparing tax returns. You can use a self-assessment tax guide that can help you get started. You need to provide your annual salary and the amount of tax you have paid. You also need to provide your P60 and P45 tax forms. These documents show your gross salary and tax deductions.

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