The Essential Guide to Self-Assessment Tax Returns for the Self-Employed

Filing a Self-Assessment tax return is a fact of life for self-employed individuals, small business owners and freelancers. Get it right and it's straightforward. Get it wrong, or leave it too late, and it becomes stressful and expensive.

This guide covers who needs to file, what you'll need, how the process works step by step, and the significant change that arrived in April 2026 with Making Tax Digital. It's

part of our series of simple explainers designed to make tax make sense.

📁 Who Needs to File?

If you're self-employed and your gross earnings exceed £1,000 in a tax year, you must complete a Self-Assessment tax return. That £1,000 is the trading allowance, and it applies to your income before expenses, not your profit.

You'll also need to file if you:

• Receive rental income above £1,000 a year

• Have significant investment, savings or dividend income

• Are a company director with untaxed income to declare

• Need to pay the High Income Child Benefit Charge, which applies where you or your partner has adjusted net income above £60,000 and someone in the household claims Child Benefit

• Have Capital Gains to report from selling property, shares or other assets

• Receive foreign income

One recent change worth knowing: since October 2025, employed people liable for the High Income Child Benefit Charge can arrange to pay it through their PAYE tax code instead of registering for Self-Assessment. If that's the only reason you'd be filing, you may no longer need to.

📅 Key Dates at a Glance

The UK tax year runs from 6 April to 5 April. The headline dates are:

• 5 October - register for Self-Assessment if it's your first year

• 31 October - paper tax return deadline

• 31 January - online filing deadline and payment deadline

• 31 July - second payment on account, if you make them

Penalties for missing these are automatic and start at £100, even if you owe no tax at all. We cover every deadline, the full penalty structure, and what to do if you've already missed one in our dedicated guide to Self-Assessment deadlines and late penalties.

💻 What's Changed: Making Tax Digital

This is the big one, and it's already underway.

Since 6 April 2026, sole traders and landlords with qualifying income over £50,000 no longer file a single annual return. Instead they must keep digital records and send HMRC quarterly updates, followed by a Final Declaration after the year end.

"Qualifying income" means your combined gross self-employment and property income, before expenses. It's the combination that catches people out: £30,000 from a trade plus £25,000 of rent puts you over the line even though neither figure does on its own.

The thresholds are dropping:

• April 2026 - qualifying income over £50,000

• April 2027 - over £30,000

• April 2028 - over £20,000

If you're below £20,000, nothing changes for now and the guidance below still applies in full. If you're above the threshold for your year, the steps are different, and our guide to MTD for ITSA walks you through exactly what's required, including a decision tree to check where you stand.

✅ Step-by-Step: Completing Your Self-Assessment

1. Register with HMRC. If it's your first return, register by 5 October following the end of the tax year. You'll be issued a Unique Taxpayer Reference (UTR), which you need in order to file. Registration isn't instant, so don't leave it to the last minute.

2. Gather your documentation. You'll want invoices, bank statements, receipts, records of business expenses, and details of any other income - employment, savings, dividends, rental. Good bookkeeping through the year makes this the easy part rather than the painful one.

3. Claim your allowable expenses. Every legitimate expense reduces your taxable profit. Common ones include office costs and stationery, business travel and mileage at 45p per mile for the first 10,000 miles, stock and materials, professional fees, business insurance, and a proportion of your home costs if you work from home. The test is whether the cost was incurred wholly and exclusively for the business. Where something has mixed personal and business use, claim only the business share and keep a note of how you worked it out.

4. Submit online. File through HMRC's online service, taking care over the figures. It's worth reviewing everything once with fresh eyes before you press submit.

5. Pay what you owe. Payment is due by 31 January. If your bill is over £1,000, you'll usually also make payments on account towards next year's tax, split across 31 January and 31 July. These catch a lot of people by surprise in their second year of trading, so it's worth reading our explainer on payments on account.

⛔️ Common Mistakes to Avoid

• Forgetting income sources. Everything counts: side projects, interest, dividends, rental income, and gains on assets you've sold.

• Claiming the wrong expenses. Over-claiming invites HMRC scrutiny; under-claiming means paying more tax than you need to.

• Registering too late. No UTR means no filing, and the registration deadline is 5 October.

• Assuming the annual return still applies. If you're now within MTD for ITSA, quarterly updates are compulsory.

• Leaving it all to January. Filing early doesn't mean paying early - you still pay on 31 January, but you know the figure months ahead. Our post on why it pays to file early makes the case.

• Poor record keeping. Keep records for at least five years after the 31 January filing deadline. Bank statements alone aren't enough - HMRC wants to see what the money was spent on.

💬 Frequently Asked Questions

Do I need to file if I earned under £1,000? No. The £1,000 trading allowance means income at or below that level doesn't need reporting, provided you have no other reason to file.

What is a UTR and how do I get one? It's your Unique Taxpayer Reference, issued when you register for Self-Assessment. You can't file without it, and it can take a few weeks to arrive.

Can I claim expenses if I work from home? Yes, either using HMRC's simplified flat rate or by claiming a reasonable proportion of your actual household costs. Keep your calculation.

Do I still file an annual return under Making Tax Digital? Not in the traditional form. Quarterly updates replace it during the year, and a Final Declaration replaces the annual return at the end.

What if I can't pay my tax bill? Contact HMRC about a Time to Pay arrangement. Doing so early can prevent late-payment surcharges, so don't wait.

💡 Key Takeaways

• File if your self-employed income exceeds £1,000, or if you have rental, investment, foreign or Capital Gains income to report.

• Register by 5 October, file and pay online by 31 January.

• Claim everything you're genuinely entitled to, using the wholly and exclusively test.

• Since April 2026, those with qualifying income over £50,000 file quarterly under MTD for ITSA, with thresholds falling to £30,000 and £20,000 in the following two years.

• Keep records for five years after the filing deadline, and keep them digitally if MTD applies to you.

  
  

🤝 How ASBA Accounting Can Help

Tax rules change, and keeping on top of them alongside running a business is a lot to ask.

ASBA Accounting, based in Crawley, works with self-employed people and small businesses across West Sussex to make sure returns are accurate, submitted on time, and include every legitimate expense. We can also get you set up properly for Making Tax Digital so quarterly filing is a non-event rather than a scramble.

We offer a free initial consultation to talk through what you need.

👉 Get in touch today or call us on 01293 525656 and one of the team will be happy to help.