UK tax basics: PAYE, your tax code and Self Assessment

If you are employed, tax is simple: your employer deducts income tax and National Insurance automatically through PAYE before you are paid, so most employees never file a tax return. Everyone gets a tax-free personal allowance (12,570 pounds per year); income above it is taxed in bands. Check the tax code on your payslip - 1257L is standard. New starters are sometimes put on an emergency code and overtaxed; HMRC usually refunds this automatically, but you can also claim through your personal tax account. You must file a Self Assessment return if you are self-employed, rent out property or have significant untaxed income: register with HMRC by 5 October after the tax year ends, and file online by 31 January. The tax year runs 6 April to 5 April. HMRC never offers refunds by text or email - those are scams.