Understanding Self Assessment
Self-assessment is HMRC's system for collecting income tax from people whose tax is not fully deducted at source through PAYE. This includes the self-employed, company directors, landlords, and those with significant investment income. The deadline for online filing is 31 January following the end of the tax year.
Class 2 and Class 4 NI
Self-employed individuals pay two types of NI. Class 2 is a flat rate of £3.45 per week (if profits exceed £12,570). Class 4 is profit-based: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270. Both are collected through self-assessment.
Frequently Asked Questions
What are payments on account?â–¾
Payments on account are advance payments towards your next tax bill. Each payment is 50% of your previous year's tax bill. They are due on 31 January and 31 July. If your actual tax bill is higher, you pay a balancing payment. If it is lower, you receive a refund. You can apply to reduce payments on account if you expect lower income.
Can I deduct pension contributions?â–¾
Yes. Personal pension contributions receive basic-rate tax relief at source (the pension provider claims 20% from HMRC). If you are a higher or additional rate taxpayer, you claim the extra relief through self-assessment. The annual allowance is £60,000 or 100% of earnings, whichever is lower.
Do I need to file a self-assessment return?â–¾
You must file if you are self-employed with income over £1,000, a company director, have income over £150,000, have untaxed income (e.g., rental, investments), need to claim tax relief, or receive child benefit and earn over £60,000.
Calclypso Editorial Team
Tax calculations verified against HMRC 2025-26 rates. Last updated: April 2026. This calculator is for estimation purposes only.