self-assessment

self-assessment
A system in which taxpayers are responsible for assessing and paying the correct amount of tax on set dates. In the UK, payments are normally made in two instalments, on 31 January and 31 July each year. Any balance due is settled the following 31 January. Self-assessment does not apply to the majority of taxpayers, as they have relatively straightforward tax affairs and their tax is deducted at source by their employers or pension providers through the PAYE system. However, some taxpayers, whose tax affairs are more complicated, are required to complete an annual tax return, and this has included an optional self-assessment section since the year 1996–97. The introduction of self-assessment was accompanied by the Board of Inland Revenue being granted extensive audit powers to enquire into any tax return.

Accounting dictionary. 2014.

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