Self Assessment tax return: complete UK guide 2026

Who needs to file a Self Assessment?

You must file a Self Assessment tax return if, in the 2025/26 tax year, any of the following apply:

• You were self-employed as a sole trader and earned more than £1,000 (before expenses)
• You are a partner in a business partnership
• You received rental income from property
• You received income from savings, investments, or dividends above the tax-free allowances
• You are a company director (even if you took no salary)
• Your income exceeded £100,000 (HMRC removes the Personal Allowance above this level)
• You claimed Child Benefit and you or your partner earned over £60,000 (High Income Child Benefit charge)
• You received income from abroad
• You need to claim tax reliefs not available through PAYE (e.g. Gift Aid, pension contributions above the basic rate)

If you are unsure, HMRC has a check tool on gov.uk that confirms whether you need to register.

Key Self Assessment deadlines for 2025/26

Penalties for late filing and payment

Missing the 31 January deadline triggers an automatic £100 penalty, even if you owe no tax. The penalties escalate:

• 1 day late: £100 fixed penalty
• 3 months late: additional £10 per day (up to 90 days = £900)
• 6 months late: further £300 or 5% of tax due (whichever is higher)
• 12 months late: another £300 or 5% of tax due (plus potential criminal investigation for deliberate non-filing)

Late payment of tax also attracts interest (Bank of England base rate + 2.5%) from the day after the deadline, plus a 5% surcharge if the tax is still unpaid after 30 days.

What information do you need to complete your return?

Gather the following before you start:

• UTR number, your Unique Taxpayer Reference (10 digits, on all HMRC correspondence)
• P60 or P45, if you were employed at any point during the tax year
• Self-employment income and expenses, total turnover and categorised expenses
• Bank interest statements
• Dividend vouchers, if you received dividends from a Ltd company
• Rental income and expenses, if you have property
• Pension contribution receipts, for higher/additional rate relief claims
• Gift Aid donations
• Capital gains details, if you sold shares, property, or other assets

What expenses can self-employed people claim?

Allowable expenses reduce your taxable profit and therefore your tax bill. For self-employed sole traders, HMRC allows deductions for expenses that are wholly and exclusively for the purposes of the business. Common allowable expenses include:

• Office costs (stationery, software, equipment under £1,000)
• Travel costs, fuel, public transport, parking for business journeys (not commuting)
• Clothing, only uniforms or protective clothing, not regular clothing
• Staff costs, wages, subcontractor payments, employer NIC
• Professional fees, accountant, solicitor, bookkeeper
• Marketing, website hosting, advertising, business cards
• Business premises, rent, utilities (proportional if working from home)
• Training, courses directly related to your current trade

You can use the simplified expenses method for vehicles (flat rate per mile) and working from home (flat rate per hour). These are easier to calculate but may give a lower deduction than actual costs for some businesses.

Payments on account, the biggest shock for new filers

If your Self Assessment tax bill exceeds £1,000 and less than 80% of your tax was collected at source (via PAYE), HMRC requires you to make payments on account, advance payments towards next year's tax bill.

Each payment on account is 50% of your previous year's tax bill, due on 31 January and 31 July. This means in your first year of self-employment, your January bill can be 150% of what you expected, your actual tax for the year plus the first payment on account for the following year.

You can apply to reduce payments on account if you expect your income to be lower next year, but if you reduce them and your income turns out to be higher, HMRC will charge interest on the shortfall.

The most common Self Assessment mistakes

• Missing the registration deadline, you must register by 5 October in the year after the tax year ends, or face a late registration penalty
• Forgetting bank interest and dividends, HMRC cross-references with financial institutions and will issue a correction notice
• Claiming personal expenses as business expenses, the most common trigger for an HMRC compliance check
• Not keeping records, HMRC can request supporting evidence for any return up to 4 years after the filing deadline (7 years for serious errors)
• Missing the payments on account, many people pay the January bill and forget the July payment on account, then face a surprise penalty
• Using the wrong accounting basis, most sole traders should use cash basis (record income when received, expenses when paid) unless they have good reason to use accruals basis