Do I Need to do a Self Assessment?

This is one of the most common questions I am asked, often by people who are unsure whether HMRC expects something from them or whether everything is already dealt with through PAYE. The confusion is understandable because not everyone needs to complete a Self Assessment tax return, but many people who should do one do not realise it until HMRC gets in touch.

In this article, I want to explain clearly when you do need to do a Self Assessment, when you usually do not, and how to work it out based on your own circumstances. Everything here is based on current UK tax rules and what I see in practice every year.

What Self Assessment Is

Self Assessment is HMRC’s system for collecting tax from people whose tax is not fully settled automatically.

If all of your tax is dealt with through PAYE and your affairs are straightforward, you usually do not need to do anything further. If you have income or circumstances outside that system, HMRC expects you to report them through a Self Assessment tax return.

Completing a return is a legal obligation once you are within the system. It is not optional and it is not something to ignore once triggered.

You Usually Need to Do a Self Assessment If

There are several common situations where a Self Assessment return is required.

In my experience, you will usually need to complete one if you:

• Are self employed as a sole trader
• Earned more than £1,000 from self employment
• Are a landlord with rental income
• Are a company director and receive dividends
• Have income that is not taxed through PAYE
• Have foreign income
• Have capital gains to report
• Earn over £100,000
• Claim Child Benefit and you or your partner earn over £50,000
• Need to pay the High Income Child Benefit Charge
• Have untaxed income such as tips or commission
• Are required to pay the Marriage Allowance back
• Have complex tax reliefs to claim

This is not an exhaustive list, but it covers the majority of cases I deal with.

Self Employed and Side Income

One of the biggest areas of confusion is side income.

If you earn money outside your main job, even if it feels small or irregular, it can still trigger Self Assessment. This includes freelance work, online selling, consulting, or cash in hand work.

There is a £1,000 trading allowance which means some people do not need to register or file, but once income goes above that level, Self Assessment is usually required.

From experience, people often assume HMRC will tell them if they need to file. That is not how the system works. The responsibility sits with you.

Landlords and Property Income

If you receive rental income, you will almost always need to complete a Self Assessment tax return.

This applies whether you own one property or several, and whether the property is residential or commercial. Even if the rental income is modest or the property makes a loss, it still needs to be reported.

Property income is one of the most common reasons people are brought into Self Assessment later than they should have been.

Company Directors and Dividends

Being a company director does not automatically mean you need to do a Self Assessment, but in practice most directors do.

If you receive dividends, benefits in kind, or other income outside PAYE, a return is usually required. Many directors are surprised by this, especially if they assume payroll covers everything.

In my experience, director tax is one of the areas where professional advice is particularly valuable.

High Earners and PAYE

Even if you are taxed entirely through PAYE, you may still need to complete a Self Assessment if your income is high.

Earning over £100,000 often brings additional reporting obligations, particularly because the personal allowance is reduced and certain reliefs change.

Similarly, if you or your partner receive Child Benefit and one of you earns over £50,000, Self Assessment is often required to deal with the High Income Child Benefit Charge.

You Usually Do Not Need to Do a Self Assessment If

Many people worry unnecessarily.

You will not usually need to complete a Self Assessment if:

• You only have one PAYE job
• All tax is deducted correctly through payroll
• You have no other income to report
• Your affairs are straightforward
• HMRC has not issued you a notice to file

That said, assumptions can be risky. I often see people who believe their situation is simple when it is not.

HMRC Notices and Legal Obligation

If HMRC issues you with a notice to file a Self Assessment return, you must complete one, even if you think it is unnecessary.

Ignoring a notice leads to automatic penalties. If you believe you should not be filing, the correct approach is to contact HMRC or have an accountant deal with it on your behalf.

Once you are in the system, you stay in it until HMRC formally removes you.

Deadlines You Need to Know

If you do need to complete a Self Assessment, deadlines matter.

Registration is usually required by 5 October following the end of the tax year in which you first needed to file.

Online tax returns are normally due by 31 January following the end of the tax year.

Missing deadlines leads to automatic penalties, even if no tax is owed.

How an Accountant Helps You Decide

One of the most valuable things an accountant does is confirm whether you actually need to file.

In my work, I often review someone’s income and circumstances and confirm that Self Assessment is not required. That reassurance alone is helpful.

Where a return is required, an accountant ensures it is done correctly, on time, and with nothing missed.

Key takeaways

Whether you need to do a Self Assessment depends entirely on your individual circumstances.

If you have income outside PAYE, earn above certain thresholds, receive rental income, or have more complex financial arrangements, there is a strong chance that you do need to file.

From my experience, the biggest problems arise when people assume they do not need to do anything and delay checking. If you are unsure, it is always better to confirm early than deal with penalties later.