Self Assessment: Frequently Asked Questions

General

Q. What is Self Assessment?

A. Under Self Assessment it is clearer what you have to do to get your tax right first time, when you have to do it, and what happens if you don't meet the deadlines.

It applies to everyone who gets a tax return. However most people do not get a tax return and pay through PAYE or other deduction at source arrangements.

The first Self Assessment tax return was issued in April 1997.

The Self Assessment tax return is made up of a basic core return together with separate supplementary pages - which ones you get will depend on your circumstances and the type of income you receive.

One of the biggest changes is that your tax bill will be based on the figures that you provide on your tax return without us first checking them in detail and agreeing them. We will check them later, within a year of the final deadline for sending the return back to us (31 January).

You need to fill in your return giving full details of all taxable income and gains you received in the year, and claim any allowances as well. This means that you are responsible for ensuring that you pay the right amount of tax, even if you do not actually work out the tax yourself.

We will work out your tax bill for you, (in fact, we'd prefer to do this) but you can work it out yourself if you wish.

We will send you a statement showing what you owe and what you've paid.
There will be one tax bill and one set of payment dates.

If you have any queries about your tax affairs you can contact your local Inland Revenue office (the telephone number is shown on the front of your tax return). Outside office hours there is also a Helpline facility which you can call on 0845 9000 444 for general advice. (If phoning from abroad the telephone number is: +44 161 931 9070)

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Q. What's better under Self Assessment?

A. Self Assessment provides:

  • an easy-to-follow return tailored to your circumstances covering all your sources of income and gains, and your reliefs, deductions and allowances for one year.
  • a separate section where you can calculate your own tax, if you wish. If you don't want to, we will do it for you
  • one set of payment dates for tax not paid at source
  • one main point of contact for your tax affairs
  • a clear statement of your account with us, showing payments due and payments made.

Q. Who does Self Assessment apply to?

A. Self Assessment applies to:

  • self employed people including business partners
  • company directors
  • other people with more complicated tax affairs including people who pay higher rate tax
  • pensioners with more complex tax affairs
  • people who received rent or other income from land and property in the UK
  • trustees and personal representatives
  • trustees of approved self-administered pension schemes
  • non-resident company landlords

For more information select the relevant category from the SA index page.

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Q. Must I employ an accountant?

A. It'll still be up to you whether to use an accountant or not.

The majority of self-employed people already use accountants and they may want to carry on doing that. Self Assessment brought in new rules that made it easier for you to understand your tax. So if you didn't use an accountant under the old system, you're unlikely to need one for Self Assessment.

People find it useful to have accountants for reasons other than dealing with their tax affairs, for example, proper accounting helps them manage their business better.

Q. How has Self Assessment affected partnerships?

A. The introduction of Self Assessment brought two main changes:

  • A partnership is no longer assessed on its profits in the partnership name. Instead the partners are assessed separately and pay tax on their share of the profits. It is as if all partners were in business on their own.
  • Partners are solely responsible for the tax on their own share of the profits. They no longer have to pay the tax owed by another partner.

The partnership still needs to send us a partnership return showing the total profit or loss made by the partnership business, any related information, and the split between partners. One partner can be nominated to be responsible for the partnership tax return BUT any penalties for sending the return in late will be imposed on each partner.

One thing that hasn't changed is joint liability - it remains the same for partnership business debts - for example the PAYE tax on employees, where all the partners will be held to be accountable.

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Who does Self Assessment apply to?

A. Self Assessment applies to:

  • self employed people including business partners
  • company directors
  • other people with more complicated tax affairs
  • pensioners with more complex tax affairs
  • people who received rent or other income from land and property in the UK
  • trustees and personal representatives
  • trustees of approved self-administered pension schemes
  • non-resident company landlords

Further details can be found in the new guidelines for Self Assessment tax returns

For more information select the relevant category from the SA index page.