Self assessment is HMRC's system for collecting income tax from people whose tax affairs aren't fully dealt with through PAYE. That includes the self-employed, company directors, landlords, and anyone with significant untaxed income. About 12 million people file a return each year, and a fair few leave it until the last possible moment.
Who needs to file a self assessment return?
You'll probably need to register for self assessment if you:
- Are self-employed as a sole trader and earned more than £1,000
- Are a partner in a business partnership
- Earned over £150,000 in the tax year
- Had rental income
- Received foreign income
- Need to pay Capital Gains Tax on the sale of assets
- Are a company director (unless you only received PAYE salary and dividends)
- Had income from savings, investments, or dividends above your allowances
If you're employed and your only income is your salary, your employer handles your tax through PAYE and you usually don't need to file. But there are grey areas — like if you have a side hustle on top of your main job.
Key deadlines
For the 2025/26 tax year (6 April 2025 to 5 April 2026):
- 5 October 2026 — register for self assessment if you haven't filed before
- 31 October 2026 — deadline for paper returns (hardly anyone uses these anymore)
- 31 January 2027 — deadline for online returns AND payment of any tax owed
- 31 July 2027 — second payment on account due (if applicable)
Miss the 31 January deadline by even a day and you'll get an automatic £100 penalty, regardless of whether you owe any tax. After three months, daily penalties kick in. After six months, another £300 or 5% of the tax due (whichever is greater). It adds up fast.
How to register
You register for self assessment through GOV.UK. HMRC will send you a Unique Taxpayer Reference (UTR) — a 10-digit number — by post within about 10 working days. You'll also need to set up a Government Gateway account if you don't have one already. The whole process is straightforward but slow, so don't leave it until December.
Filing your return online
Most people file through HMRC's free online service. You'll need your UTR, National Insurance number, and records of all your income and expenses for the tax year. The online system walks you through each section — employment, self-employment, property, capital gains, and so on.
If your affairs are complicated, you might prefer to use commercial software like FreeAgent, Xero, or QuickBooks, which can submit returns directly to HMRC. Or you can pay an accountant — expect to spend £150-£500 for a straightforward return, more if you have rental property, capital gains, or foreign income.
Payments on account
If your self assessment bill is over £1,000 and less than 80% of your tax was collected through PAYE, HMRC will ask you to make "payments on account." These are advance payments towards next year's tax bill, each equal to half of the previous year's liability. You pay the first on 31 January and the second on 31 July.
This catches a lot of people out in their second year of self-employment. You might face a January bill that includes last year's balancing payment plus the first payment on account for the current year — effectively 150% of what you expected. Set money aside monthly to avoid a shock.
Common mistakes to avoid
A few things that trip people up regularly:
- Forgetting to include bank interest or dividend income
- Not claiming allowable expenses (office costs, travel, professional subscriptions)
- Mixing up gross and net figures for self-employment income
- Not keeping receipts — HMRC can ask for records going back six years
HMRC's guidance notes are actually quite readable. The GOV.UK help pages for each section of the return explain what to include and what to leave out. When in doubt, check the official guidance rather than guessing.