What Is Self-Assessment?
Self-assessment is HMRC’s system for collecting Income Tax. Unlike PAYE (Pay As You Earn), where tax is automatically deducted from your salary, self-assessment requires individuals to calculate and report their own tax liabilities. Self-assessment applies to people with income that isn’t taxed at source, such as self-employed individuals, landlords, or those earning through dividends.
Who Needs to Register for Self-Assessment?
You need to register for self-assessment if you meet any of the following criteria:
- You are self-employed and earn more than £1,000 in a tax year.
- You are a company director (unless exempt).
- You earn more than £500 in dividends or £10,000 in savings interest.
- You have income from rental property in the UK or abroad.
- Your total annual income exceeds £100,000.
- You claim child benefit, and you or your partner earn more than £60,000 (High Income Child Benefit Charge).
- You have foreign income or need to pay tax on income earned abroad.
- You made profits from selling assets subject to Capital Gains Tax.
Even if you don’t fit these criteria, you may still need to file a self-assessment return if HMRC sends you a notice to complete one.
When to Register for Self-Assessment
You should register by 5th October in the tax year after the year you started earning untaxed income. For example, if you began self-employment in April 2024, you need to register by 5th October 2025.
To register:
- Visit the HMRC website and create a Government Gateway account.
- Complete the relevant registration form (e.g., CWF1 for sole traders).
- Wait to receive your Unique Taxpayer Reference (UTR) and activation code.
Do you need to register for Self-Assessment?
Talk to the friendly experts at Hargreaves Owen. We’ll answer your queries and ensure your self-assessment journey is as smooth as possible.