Self-assessment involves making a declaration to the Government, once a year, about any money you’ve received that should be taxed. 

If you work as an employee, and pay tax through the Pay As You Earn (PAYE) system, then income tax is collected before you get your wages.  It’s the portion that you never see – it’s ‘deducted at source’.  If you’re self-employed (or in a partnership), then you’ll have to complete a self-assessment of your earnings and remember to pay the tax you owe, by the Government’s deadlines.  You might also need to complete a tax return if you’re employed and usually pay income tax via PAYE but have other sources of income during the year (income from properties, for example).

Self-assessment involves keeping accurate records of your income and expenditure. For self-employed persons, that includes everything you invoice your clients, your costs, your overheads, your earnings, National Insurance (NI) contributions and tax deductible expenses.  For investors, it includes recording any dividends and any growth in value.  It can appear to be a complicated process, but in all cases, an independent financial adviser (IFA) can look at your circumstances and let you know if self-assessment is necessary.  

Questions you might like to ask an IFA…

When do I need to submit my tax return?

Will someone let me know in advance, if I need to complete a self-assessment?

Which expenditure can I claim against the amount of tax I owe?

Which savings and investments do I need to include in my self-assessment paperwork?