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Glossary

Self Assessment:

/ˌsɛlf əˈsɛsmənt/. noun The process of calculating and reporting your income and expenses to HRMC each year, rather than being taxed at source.

Self Assessment is the process of calculating, reporting your income and paying your taxes to HMRC each year.

When you’re self-employed, you need to register with HRMC to explain that you’ll be responsible for calculating and reporting your own income and tax liability, rather than being taxed at source by an employer.

Once registered, you’ll be required to complete a tax return, detailing your income, expenses and tax liability each year, and then pay HMRC the appropriate amount.

This is a legal obligation, once you’ve made over £1000 of income that is not taxed.

Advice and guides from the ecosystem

gov.uk
Self Assessment Tax Returns
Guidance on self-assessment tax returns for self-employed individuals by the UK government.
Money Helper
How to fill in a Self Assessment Tax Return
A guide to filling in a Self Assessment Tax Return, including how to calculate your taxable income, and how to work out your tax due.

Related Glossary Terms

Income Tax
Tax due payable to anyone earning over a certain income in the UK, and the primary tax you'll pay when you're self-employed
Corporation Tax
Tax you pay on business profits, when registered as a limited company.
VAT
Value Added Tax, additional tax you'll be charging your customers and liable to pay to HMRC, when your turnover is over £90,000
HMRC
HM Revenue & Customs (HMRC) is the tax authority of the U.K. government.
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