UK Income Tax & PAYE Guide
Understand how Income Tax is commonly collected through PAYE and when additional reporting may be needed.
Quick answer
PAYE normally deducts Income Tax and National Insurance from employment or pension income. Your tax code helps determine deductions, but other income or circumstances can create a Self Assessment obligation or require HMRC to adjust the code.
Check your tax position
- Review the tax code shown on payslips and HMRC records.
- Check that employers and pensions are using the expected code.
- Keep P45, P60, payslips and benefit information.
- Report relevant changes and untaxed income when required.
What PAYE does
Employers and pension providers apply HMRC tax codes when calculating deductions. A code is not a complete tax return; it is a mechanism for collecting tax during the year. Multiple income sources can require additional attention.
When Self Assessment may apply
Self Assessment can apply to self-employment, partnership income, certain untaxed income and other circumstances defined by HMRC. Use the current HMRC checker rather than assumptions based only on income level.
