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Note: From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages reduced from 12% to 10%. From 6 April 2024, that rate is reduced further to 8%, the main rate of self-employed class 4 NIC is reduced from 9% to 6% and class 2 NIC is no longer due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. We will include these changes with our updates in the next few weeks.

Updated on 6 April 2024

Self assessment tax calculations

A key part of self assessment is calculating your tax (and, if appropriate, self-employed National Insurance contributions and student loan repayments) due for the tax year and including this on the tax return.

brown paper with a tear in the centre, through the tear you can see a white background with the words 'SELF ASSESSMENT TAX' in black text
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Content on this page:

Filing online

If you file your tax return online using HMRC’s system, it will calculate how much you owe. You can view the calculation online or print it out. If you use third-party software to file the return, this should also do the calculation for you and allow you to print out a copy of the calculation for your own records.

Filing on paper

HMRC will work out how much you owe based on the entries on the tax return and send you the tax calculation. This is known as a form SA302. Provided you submit the paper return by the due date, HMRC guarantee they will let you know what payment you need to make before it becomes due.

However, if you submit the return late, then although HMRC will still do the calculation for you, they cannot be sure this will be done in time for you to make the right payment by the due date.

Therefore, if you submit a paper tax return late and don’t receive a calculation from HMRC before the due date for payment of the tax, you could consider making a payment by the due date based on an estimate of your tax bill. Otherwise, if you make the self assessment payment late, penalties and interest may become payable. These are in addition to penalties for late filing.

Tax paid at source

You may already have had tax deducted from some income – for example, if you are registered under the construction industry scheme (CIS) or you are employed.

You should include all taxable income on the tax return, whether or not it has already been taxed, making sure to include the tax that has been deducted at source in the correct box on the return too. The tax calculation will automatically take account of any tax paid at source (for example, through CIS or PAYE) that has been included on the tax return.

The tax calculation will then show the amount that is left to be paid through self assessment or to be refunded. Note that it might need to be adjusted for any payments on account already made, as we explain below.

Payments on account

If you needed to make payments on account, any payments on account already made should be compared to the final position to see whether there is any further amount to pay (known as the balancing payment) or whether a refund is due.

You do not include any tax paid as a payment on account anywhere on the tax return form itself.

Example – self assessment calculation with payments on account

Chloe, who lives in England, is employed part-time and also runs her own business. During the 2023/24 tax year she earned £15,000 from her job and paid tax through PAYE of £486. She also earned profits of £4,000 from her self-employment.

When Chloe completes her 2023/24 tax return, she includes all her employment income and tax deducted through PAYE and her self-employment profits. Her tax calculation will look as follows (no self-employed National Insurance contributions are due in this case):

Tax calculation
 

£
Employment income

15,000
Self-employment profits

4,000
Total income received

19,000
minus Personal Allowance

-12,570
Total income on which tax is due

6,430
Income tax due at 20%

1,286
minus tax deducted via PAYE

-486
Total income tax due by 31 January 2025

800

If Chloe had higher self-employed profits in the 2022/23 tax year, she might have been due to make payments on account for the 2023/24 tax year.

Let’s say she paid £1,200 in total via payments on account, as follows:

  • 31 January 2024: £600
  • 31 July 2024: £600

When Chloe submits her 2023/24 tax return online in November 2024, her total income tax due would still show as £800 as per the calculation above. But she is actually due a refund of £400 (the £800 she owes, minus the £1,200 she has paid) as she has overpaid her tax through payments on account. Chloe will need to deduct her payments from the online calculation to work out she is due a refund.

After the online tax return has been automatically processed, Chloe should be able to see that she is due a refund in her HMRC personal tax account. This should be repaid to her by HMRC shortly after the tax return is processed but if not, she can claim this back from HMRC.

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