Self Assessment is the system used by HM Revenue & Customs to collect Income Tax from individuals whose tax is not fully deducted at source. It places responsibility on the individual to report income, calculate liabilities, and pay any tax due.

What is Self Assessment?

Self Assessment is a tax reporting process, not a separate tax. It brings together all sources of taxable income in a tax year which run from 6 April to 5 April the following year, including:

  • Self‑employment profits
  • Rental income
  • Dividends and investment income
  • Foreign income
  • Other untaxed income

A tax return is submitted annually to declare these amounts and calculate the tax payable.

Who does it apply to?

You may need to file a Self Assessment tax return if you:

  • Are a sole trader
  • Are a partner in a partnership
  • Receive rental income from property
  • Earn dividend or investment income
  • Have foreign income
  • Have total income over £100,000
  • Need to pay the High Income Child Benefit Charge

Even if tax is deducted through PAYE, a return may still be required depending on your circumstances.

Key Dates

Key deadlines for Self Assessment:

  • 5 October – Register for Self Assessment (if newly required)
  • 31 January – Online tax return filing deadline
  • 31 January – Payment of tax due for the previous tax year
  • 31 January – First payment on account
  • 31 July – Second payment on account

Late filing or payment can result in penalties and interest.

Tax Rates (2026/27)

The main tax bands and rates in the UK (excluding Income Tax in Scotland) are:

Tax Band Taxable Income Income Tax Dividend Tax
Personal Allowance Up to £12,570 0%
Basic Rate £12,571 – £50,270 20% 10.75%
Higher Rate £50,271 – £125,140 40% 35.75%
Additional Rate Over £125,140 45% 39.35%
  • The Personal Allowance reduces by £1 for every £2 of income over £100,000.
  • A Personal Savings Allowance may be available on savings interest. The first £1,000 of savings interest is tax free for basic rate taxpayers; this is reduced to £500 for higher rate taxpayers.

Tax Planning Considerations

  • Payments on account – Advance payments can catch taxpayers off guard — forecasting liabilities early helps avoid cash flow surprises.
  • Use of allowances and reliefs – Making full use of allowances (e.g. Personal Allowance, dividend allowance) ensures you are not overpaying tax.
  • Pension contributions – Personal pension contributions can extend basic‑rate bands and reduce higher‑rate exposure.
  • Timing of income – Where possible, managing when income is received (e.g. dividends or bonuses) can help control tax band exposure.
  • Record keeping – Maintaining accurate and up‑to‑date records reduces errors, risk of enquiry, and last‑minute pressure.
  • Claiming allowable expenses – Ensuring all legitimate business and property expenses are claimed helps reduce taxable income.

Cube Partners Tip 💡

The January deadline is only part of the story. Early preparation not only reduces stress, it often highlights tax planning opportunities before the year end, when action can still be taken.