The UK self-assessment is a system used by Her Majesty's Revenue and Customs (HMRC), for individuals to report their income, expenses, and other relevant financial information in order to calculate and pay their tax liabilities. It applies to individuals who are self-employed, have income from rental properties, receive income from investments, have capital gains, or have other sources of income that require them to report and pay taxes.
Under the self-assessment system, individuals are required to complete an annual tax return, also known as a self-assessment tax return, which is a form that details their income and expenses for the tax year. This includes information such as employment income, self-employment income, rental income, interest and dividends, and other relevant financial transactions. The tax return must be submitted to HMRC by the deadline, which is usually 31 January following the end of the tax year for online submissions (or 31 October for paper submissions).
Based on the information provided in the self-assessment tax return, HMRC calculates the individual's tax liability, which is the amount of tax owed for the tax year. This includes income tax, National Insurance contributions, and other applicable taxes. The individual is responsible for paying the calculated tax liability to HMRC by the payment deadline, which is usually also 31 January following the end of the tax year. Late submissions or late payments may result in penalties and interest charges.
It's important for individuals to accurately report their income and expenses in their self-assessment tax return and pay their tax liabilities on time to comply with UK tax laws and avoid potential penalties or fines. Nasa Consulting has significant experience of preparing self assessments for our clients and ensuring their accuracy for our clients.