What does 'Self Assessment' allow individuals and businesses to do?

The concept of 'Self Assessment' is a fundamental part of the UK tax system that enables individuals and businesses to report their income and determine their tax liability to HM Revenue and Customs (HMRC). This process requires taxpayers to complete a tax return each tax year, detailing various sources of income, allowable expenses, and any tax reliefs that may apply to their circumstances. By doing this, taxpayers can calculate the amount of tax they need to pay based on the income reported.

This method of reporting promotes accountability, as individuals and businesses are responsible for their own tax filings. Additionally, it allows for a more streamlined process, as taxpayers can submit their returns online, track their earnings, and manage their tax payments directly through HMRC's platforms. The accuracy of the information they provide is essential, as it directly influences their tax obligations.

While aspects such as National Insurance contributions and tax refunds do relate to the overall tax process, they are not the primary function of 'Self Assessment.' Instead, they are components of the broader framework within which individuals and businesses calculate and report their tax responsibilities. Additionally, securing loans based on tax filings is not addressed by 'Self Assessment'; this falls under financial lending processes which may use tax information as part of credit evaluations but is not