self assessment
Self assessment is the system where you work out your own tax, tell the tax authority the figure, and pay it yourself instead of waiting for them to chase you.
In plain English
Most people only remember tax exists when a friend mentions it, usually with a groan, usually in December when everyone is suddenly filing something.
Self assessment is what makes tax your own homework rather than a surprise test someone else marks. If you earn money that nobody deducts tax from before it reaches you, the tax office will not automatically know what you owe. You are the one who adds it up, declares it, and pays.
This matters most for people whose income does not pass through a single tidy payroll. A freelance graphic designer in Lagos billing clients directly, a landlady collecting rent in Abuja, a consultant in London doing self employed work outside PAYE, all of them sit under self assessment rather than the calm automatic deduction that salaried workers enjoy.
Someone sending money home from Canada might not think this touches them, but if they also run a small side business back in Nigeria, that income still needs declaring under self assessment, separate from whatever tax rules cover their Canadian salary.
The logic is simple even if the paperwork rarely feels that way. You keep records through the year, total your income and allowable expenses, work out what you owe using the current rates, file the return by the deadline, and pay. Miss the deadline and the tax authority adds penalties, sometimes before you have even opened the letter.
Think of it less as punishment and more as proof that you are the accountant of your own life, at least for one season each year.
A freelance photographer in Lagos earns ₦3,200,000 in a tax year from various clients with no tax deducted at source. Under self assessment, she totals her income, subtracts allowable business expenses like equipment and transport, calculates the tax due on the remainder using the applicable rate, files her return with the tax authority, and pays the amount herself before the deadline.
Questions people ask
Who actually needs to do self assessment?
Mostly people whose income is not automatically taxed by an employer before it reaches them, such as freelancers, business owners, landlords, and consultants working outside a standard payroll.
What happens if I file late or get the figure wrong?
Late filing usually attracts a penalty, and an incorrect figure can lead to interest or further penalties once the tax authority reviews it, so keeping honest running records through the year saves a lot of stress later.
Can I get help working out my self assessment?
Yes, many people use a tax accountant or the tax authority's own guidance to check their figures, and this is often worth the cost if your income comes from several different sources.
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