The systems for self-assessment and the making of returns: formula sheet

Key formulas

Tax year

6 April to 5 April

Tax year 2025–26 runs from 6 April 2025 to 5 April 2026.

Notify chargeability

By 5 October following the end of the tax year

Applies if you are chargeable to tax and have not received a notice to file. For 2025–26, the date is 5 October 2026.

Paper return deadline

31 October following the end of the tax year

For 2025–26, this is 31 October 2026.

Online return deadline

31 January following the end of the tax year

For 2025–26, this is 31 January 2027.

Late notice to file: paper

Three months after the notice is issued

Applies when the notice is issued after 31 July, so the normal 31 October date would give less than three months.

Late notice to file: online

Later of 31 January and three months after the notice is issued

Never earlier than the normal online deadline.

Each payment on account

50% × (prior year income tax + Class 4 NIC − tax deducted at source)

Based on the previous year's liability. Excludes capital gains tax and Class 1 NIC. Two equal payments.

Due dates of payments on account

First: 31 January in the tax year. Second: 31 July after the tax year.

For 2025-26: 31 January 2026 and 31 July 2026.

Balancing payment

Actual income tax + Class 4 NIC for the year − payments on account − tax deducted at source

Due 31 January after the tax year. Add any CGT due for the year on the same date.

When no payments on account are required

Prior year income tax and Class 4 NIC liability − tax deducted at source < £1,000, or tax deducted at source ≥ 80% of prior year income tax and Class 4 NIC liability

Test each condition. Meeting either one removes the need for payments on account. Both tests use the previous year's income tax and Class 4 NIC liability.

Total due on 31 January after the year

Balancing payment + CGT + first payment on account for the next year (if required)

The next year's first payment on account is 50% of the year just ended (net of tax deducted at source). It is due only if neither exemption test applies for that next year.

Interest rates given in the exam

Underpaid tax 8·50%; overpaid tax 3·50%

These are the assumed rates in the ACCA tax rates and allowances. Interest on underpaid tax runs from the due date.

Individual in business or with property income

Keep until 5 years after the 31 January filing deadline

The 31 January following the end of the tax year. Example: 2025/26 deadline is 31 January 2027, so keep until 31 January 2032.

Other individuals (no business or property income)

Keep until 1 year after the 31 January filing deadline

For example, an employee with only employment and savings income. 2025/26: keep until 31 January 2028.

Companies (corporation tax)

Keep for 6 years from the end of the accounting period

Year ended 31 March 2026: keep until 31 March 2032.

Penalty for inadequate records

A penalty of up to £3,000 can be charged for each return period

The £3,000 is a maximum, not a percentage of tax. The return period is the tax year or accounting period. Separate from penalties for errors (careless 30%, deliberate not concealed 70%, deliberate and concealed 100% maximum).

HMRC enquiry window (individual's own return)

12 months after the actual filing date, for a return filed on time

This window runs from the date you actually filed. The record keeping period runs from the 31 January deadline.

Taxpayer amendment limit

Amend within 12 months of the filing deadline

For an individual, the deadline is 31 January following the tax year. Companies use 12 months from the filing due date.

HMRC correction of obvious errors

Within 9 months of the date the return was filed

The taxpayer can reject the correction within 30 days of the notice.

Enquiry limit: return filed on time

Notice within 12 months of the actual filing date

Measured from the date HMRC receives the return, not from the deadline. No reason needs to be given.

Enquiry limit: return filed late (individual)

The first quarter day falling at least 12 months after the actual filing date

Quarter days are 31 January, 30 April, 31 July and 31 October. A company's late return gets 12 months from the end of the quarter in which it was filed.

Enquiry into an amended return

Limited to the amendment window after the amendment is made

The same pattern applies: 12 months, or for an individual's late amendment, the first quarter day falling at least 12 months after it is made.

Discovery assessment time limits

4 years (not careless or deliberate, but insufficient information); 6 years (careless); 20 years (deliberate)

Measured from the end of the tax year (individuals) or accounting period (companies). Conditions must be met: careless or deliberate behaviour, or insufficient information given to HMRC. An innocent error with adequate information cannot be assessed.

Penalty maximums for errors (ACCA table)

Careless 30%; deliberate but not concealed 70%; deliberate and concealed 100%

Minimums: careless 0% unprompted and 15% prompted; deliberate not concealed 20% and 35%; deliberate and concealed 30% and 50%.

Late filing penalty: first stage

Return up to 3 months late: ₹ equivalent is £100 fixed penalty, charged as soon as the return is late

Charged even if no tax is due. This is a fixed amount, not based on tax.

Late filing penalty: daily penalty

Return more than 3 months late: £10 per day, for up to 90 days, so a maximum of £900

Starts after the three-month point. Count only the days the return remains outstanding, up to 90.

Late filing penalty: 6 and 12 months

More than 6 months late: greater of 5% of tax due and £300. More than 12 months late: a further greater of 5% of tax due and £300

Each is separate and added to the earlier penalties. Higher amounts can apply where information is deliberately withheld, so read the question.

Late payment penalties (income tax)

5% of tax unpaid 30 days after the due date, plus 5% of tax still unpaid 6 months after the due date, plus 5% of tax still unpaid 12 months after the due date

Each 5% applies to the tax still unpaid at that date. Tax paid before a date is not charged at that date.

Interest on underpaid tax

Interest = tax paid late × 8.5% × months late ÷ 12

Runs from the due date to the payment date. Interest on overpaid tax is 3.5%.

Standard penalties for errors

Penalty = potential lost revenue × percentage. Careless: max 30%, min 0% unprompted, 15% prompted. Deliberate but not concealed: max 70%, min 20% unprompted, 35% prompted. Deliberate and concealed: max 100%, min 30% unprompted, 50% prompted

The percentage is chosen within the range according to the quality of the disclosure.

VAT late payment penalties

Up to 15 days late: none. 16 to 30 days late: 3%. More than 30 days late: 6% plus a daily penalty at an annual rate of 10%

Do not mix these with the income tax late payment penalties.

Time limit to appeal

Written appeal to HMRC within 30 days of the decision

A late appeal may be accepted if you have a reasonable excuse for the delay.

Routes after an appeal

Agreement with HMRC, or internal review, or First-tier Tribunal

The review is by an HMRC officer not involved in the original decision. The tribunal is independent.

Interest on overpaid tax

3·50% (rate given in the Tax Rates and Allowances)

Use the rate you are given. Do not confuse it with 8·50% on underpaid tax.

Interest on underpaid tax

8·50% (rate given in the Tax Rates and Allowances)

This is the rate that applies when you owe HMRC, not when HMRC owes you.

Overpaid tax claims

Claim repayment from HMRC within the time limit for the tax concerned

The limit depends on the tax. Check the question for which tax and which period.

Quick revision

• Online returns are due by 31 January after the tax year. Paper returns are due by 31 October.
• The balancing payment and the first payment on account are due on 31 January. The second payment on account is due on 31 July.
• Each payment on account is normally 50% of the prior year's income tax and Class 4 NIC liability that was not collected at source.
• No payments on account are due if the prior year's income tax and Class 4 NIC liability was below £1,000, or if over 80% of the prior year's income tax liability was collected at source.
• Business records are kept for five years after the 31 January filing date. Non-business records are kept for one year after that date.
• Companies keep records for six years from the end of the accounting period.
• HMRC's enquiry window for a return filed on time is 12 months from the actual filing date. For a late return, the window ends on the next quarter day (31 January, 30 April, 31 July or 31 October) after the first anniversary of the filing date.
• Discovery assessments can be made up to four years after the end of the tax year to which they relate. This extends to six years for carelessness and 20 years for deliberate behaviour. All the periods run from the end of that tax year.
• Interest rates given: 8.5% on underpaid tax and 3.5% on overpaid tax.
• Penalties for errors: maximum 30% careless, 70% deliberate but not concealed, 100% deliberate and concealed.
• A claim for overpaid tax is normally made within four years of the end of the tax year.
• You can appeal against an HMRC decision in writing within 30 days of the date of the decision notice. You can ask for an internal HMRC review or appeal to the tax tribunal.

Common mistakes

• Using 31 January 2026 as the online deadline for tax year 2025–26. Fix: The deadlines fall after the tax year ends. For 2025–26, the online deadline is 31 January 2027.
• Confusing the 5 October notification date with a filing deadline. Fix: 5 October is only the date to tell HMRC you are chargeable. It does not mean you file your return then.
• Including capital gains tax in the payments on account. Fix: Payments on account cover only income tax and Class 4 NIC. CGT is paid in full on 31 January after the year end.
• Basing payments on account on the current year's liability. Fix: They are always based on the previous year's liability. The current year only affects the balancing payment and the next year's payments.
• Counting the five years from 5 April, the end of the tax year. Fix: For individuals the clock starts at the 31 January filing deadline, not the year end.
• Using five years for every individual. Fix: Five years is for business or property income. Individuals with only employment or investment income keep records for one year after 31 January.
• Measuring the enquiry window from the filing deadline instead of the actual filing date. Fix: Amendment: 12 months from the deadline. Enquiry: 12 months from the actual filing date.
• Saying HMRC needs a reason to open an enquiry. Fix: HMRC can enquire without giving any reason. It can also enquire at random.
• Treating interest and penalty as the same thing, or leaving out interest entirely. Fix: Write them as separate lines. Interest is a rate × time on the tax. A penalty is a fixed amount or a percentage.
• Charging the late payment penalty on the full tax liability each time. Fix: Check what is unpaid at the 30-day, 6-month and 12-month points. Tax paid before a point is excluded from that point's 5%.

Exam tips

• Always convert the tax year into actual calendar dates with years. Examiners use plausible wrong dates as distractors.
• In objective tests, read the filing method. Paper and online answers are usually both offered as options.
• If the question gives the date the notice was issued, check whether it is after 31 July before using the normal dates.
• In written questions, set out the dates in a short list so they are easy to mark: notify, paper, online.
• Do not spend time on penalty amounts here unless asked. Answer the date question first.
• Write the due dates beside every figure. Marks are often given for the correct date as well as the amount.
• Always state the exemption tests: under £1,000 net, or at least 80% deducted at source. Show the working even if neither applies.
• Keep CGT out of the payments on account base, and add it only to the 31 January balancing date.