Self Assessment

The HMRC system for paying income tax on earnings not taxed through PAYE, used by self-employed individuals and sole traders. Tax return must be filed by 31 January each year.

Missing the Self Assessment deadline results in automatic £100 fines, with more accruing daily. Every self-employed founder needs to understand and file this correctly.

You run a digital product business as a sole trader and earn £28,000 profit. You file a Self Assessment by 31 January, pay income tax on the profit above the personal allowance.