What's the difference between PAYE and Self Assessment?

PAYE (Pay As You Earn) is the system your employer uses to deduct income tax and National Insurance from your wages before you're paid. You never have to do anything — it happens automatically. Self Assessment is how you report income that PAYE doesn't cover, such as freelance work, rental income, dividends, or capital gains. Some people only ever use PAYE. Others use both. If you have income from multiple sources or anything outside of employment, Self Assessment is how you tell HMRC about it.