Your tax return: the basics
In this section:
- Introduction to Self Assessment
- Do you need to complete a tax return?
- Completing your tax return (individuals and directors)
- Record keeping (individuals and directors)
- Tax return deadlines and penalties
- Understanding and using Self Assessment Online
- Understanding your tax calculation
- Understanding your Self Assessment Statement
- How to pay your tax
- What to do if you can't pay your tax bill
Understanding your tax calculation
Your tax calculation shows what Income Tax you owe - or have overpaid - for a given tax year. The tax calculation will tell you when you need to pay any tax due, or how much you're due back.
On this page:
- Receiving your tax calculation
- Why it's important to check your tax calculation
- Your tax calculation covering letter
- Understanding the entries on the tax calculation pages
- When and how do you pay the 'amount due'?
- If the tax calculation relates to the last tax year
- If the tax calculation relates to an earlier tax year
- If you disagree with your tax calculation or payments on account
Receiving your tax calculation
You'll get a tax calculation if:
- you sent in a paper tax return and asked us to work out your tax
- you sent in a paper tax return and calculated the tax, but we think you made a mistake
- you sent in an amendment to a paper or online return
You won't receive a tax calculation if you filled in your return online because an online return calculates your figures for you.
Why it's important to check your tax calculation
It's important to check the figures and let us know if you disagree with them because they'll:
- form the basis of the demand for payment - your 'Self Assessment Statement'
- be used to adjust your Pay As You Earn (PAYE) tax code next year if you requested this on your Self Assessment (SA) tax return
Tell us about any queries you have before 31 January so you can pay on time - or you may have to pay penalties and interest.
Tax return and payment deadlines - find the latest dates
Your tax calculation covering letter
The covering letter tells you:
- the tax year the calculation refers to
- the 'Total Income Tax due' - this comes from the accompanying calculation page
- how and when to pay
- about any changes we have made to the figures on your tax return
If you don't agree with the figures contact an HMRC Office using the number on your tax calculation.
Understanding the entries on the tax calculation pages
Look at each entry in your calculation to make sure you fully understand it.
Income received (before tax was taken off)
This lists all your taxable income for the year - including the gross amounts before tax was deducted for things like:
- savings interest
- dividends - the gross amount includes the 10 per cent tax credit
- taxable benefits and expenses you received through work, minus any allowable expenses you can claim
The tax deducted from your income will be set off against your final tax bill.
Total income on which tax is due
This is the income you received - explained above - minus your tax-free personal allowances and any other allowances you're entitled to.
How have I worked out your Income Tax
Different types of income are taxed at different rates. Your taxable income will be shown split into these different types.
The tax rate that applies to each different type of income varies depending on:
- how much of each type you get
- the different tax bands that apply
If you're a higher-rate taxpayer (40 per cent) and you gave to charity using Gift Aid, you only received basic rate tax relief (22 per cent) when you made the donation. The tax calculation adjusts the point at which you pay higher rate tax to give you the extra 18 per cent tax relief.
Tax rates and tax bands - the latest figures
Capital Gains Tax - find out more on the Directgov website
Income Tax charged
This is the total Income Tax chargeable on your income received during the tax year.
Total Income Tax due
Any tax that's been deducted through PAYE or at source will be deducted from the 'Income Tax charged' figure to give the figure for total Income Tax due.
View helpful information on the stages of the calculation (PDF 42K)
Other entries on the calculation
Other entries on the calculation may include:
- Class 4 National Insurance contributions (NICs) - if you're self-employed
- Capital Gains Tax
- student loan repayments
When and how do you pay the 'amount due'?
The amount due for the period is shown on the front page of tax calculation covering letter. This figure won't include any tax you've already paid 'on account' or any tax outstanding.
If the tax calculation relates to the last tax year
We'll send you a separate Self Assessment Statement telling you what
to pay and how and when to pay it.
The figure on the Self Assessment Statement will take into account payments
already made and outstanding amounts owed.
We may not always be able to get a Self Assessment Statement in time for you to meet the 31 January deadline. If this happens look at your previous statements to see what payments you've already made towards the amount shown on the tax calculation. You'll also need to check if there's any tax outstanding from other tax periods. Then you can calculate what tax you owe and make the correct payment.
Understanding your Self Assessment Statement
Tax return deadlines and penalties - find the current dates
If the tax calculation relates to an earlier tax year
If you've received a tax calculation for an earlier tax year it may be because we discovered an error. You might have to make a payment right away. Check by referring to recent statements. If you file online you can check your statements and any amount owed.
Self Assessment online - find out more about the benefits and how to register
If you disagree with your tax calculation or payments on account
If you disagree with your tax calculation, contact the number at the top right-hand corner of your calculation, quoting your unique taxpayer reference (UTR). If you think your payments on account are too high you can claim a reduction using form SA303.
But tell us if your income increases because your payments on account should reflect this - if you don't you will have to pay interest and may have to pay penalties.
