Normally this is done via a self-assessment return. You are then required to make any payment by the due date. The normal due date for paying self-assessment tax is 31 January. But there are different filing dates for the tax return depending on whether you file on paper return or on-line. For tax years from 2007/08, returns submitted on paper need to be sent in by 31 October. For on-line returns you have until 31 January. For information on filing dates for tax years 2006/07 and earlier, please see the article sending your tax return.

Under self-assessment you are responsible for calculating any tax due to HM Revenue and Customs or any refund of tax due to you. If you submit your return on-line, any refund or tax due will be calculated automatically for you. If you send in your return on paper by 31 October. HM Revenue and Customs will then do the calculations for you and let you know what tax will be due on 31st January.

About one in three taxpayers falls within self assessment; most of them are self-employed, people with income from property, company directors, or people with high earnings or other income from savings.

People on relatively low incomes may be affected too. If you have any income or gains which are not either taxed at source or covered by your tax-free personal allowance you are required to notify HM Revenue and Customs who may then send you a tax return to complete.

Pensioners or individuals with a number of part-time jobs may need to submit a tax return. However HM Revenue and Customs are usually able to deal with tax underpayments up to £2,000 for employees or pensioners through a PAYE coding adjustment without the need for a self-assessment tax return.

For individuals who are due a tax refund, a letter to your tax office (for employees) or a repayment claim on form R40 (where tax has been overpaid on savings income) is more appropriate than a self-assessment tax return.

Key features

Self assessment is a way of establishing what tax is due, and collecting the tax. It does not affect the amount of tax you pay. It is the process by which people who normally get a tax bill each year notify HM Revenue and Customs of their income and capital gains, the amount of tax due, and pay their tax.

The key elements are :

• You as taxpayer are responsible for completing a tax return by the legal deadline and for keeping records to support the entries on your tax return
• You are responsible for asking for a tax return, if you have untaxed income to declare
• HM Revenue and Customs process your return as submitted, correcting only obvious errors initially. Detailed checking is left until later
• You are required to pay the correct amount of tax on the due dates whether or not HMRC issue a demand.
• You may have to make payments of tax 'on account' for the current year income or profits
• You can apply to reduce your payments on account if you know that your income has gone down from the year before. You can do this on form SA 303.(see Paying tax under self-assessment for more details.)
• You receive regular statements of account from HM Revenue and Customs showing tax falling due and payments that you have made.
• o You will be charged penalties if your return is not sent back on time, and surcharges and interest if tax is paid late
• HM Revenue and Customs may enquire about your return, and require additional information

For more details about self assessment, please see the other pages in this section.