If you are employed by an umbrella company, you only need to complete a self-assessment tax return if you have additional income that is not taxed PAYE by them.
Because contractors often have income from different sources, it is sometimes processed in different ways. If all your earnings are processed through an umbrella company, then all your tax has been taken via PAYE and there’s no need to complete a tax return.
However, if you have income which is not taxed by deductions from your umbrella provider, under PAYE, you will probably need to complete a tax return in order to provide HMRC with the details. This is called Self- Assessment.
Income that is not taxed under PAYE won’t necessarily be from contracting. It could include income you get from renting out a property, or dividends from any company investments. You must tell HMRC if you receive taxable income in addition to the income you’ve had taxed through PAYE. They will tell you whether you have to complete a tax return form.
If you want to check you are paying the right amount of tax, or if you think you may have overpaid or underpaid tax, you should contact HMRC directly on the Taxes Helpline – 0300 200 3300.