Self-Assessment Tax Returns
The self-assessment tax return system managed by HMRC ensures that individuals report and pay Income Tax on earnings not automatically taxed through PAYE (Pay As You Earn). For most permanent employees, taxes are deducted at source by employers. However, for individuals with income outside of standard employment, such as self-employed professionals, self-assessment is necessary to declare their income and calculate any tax owed.
What is a self-assessment tax return?
A self-assessment tax return provides HMRC with detailed information about your income, its sources, and applicable deductions or allowances. Taxpayers must ensure their return accurately reflects all taxable income, as well as any reliefs or expenses that can reduce their tax liability. The tax year runs from 6 April of one year to 5 April of the next, and returns, along with any tax owed, are generally due by 31 January following the tax year’s end.
Who needs to file a return?
Most people do not need to file a self-assessment tax return, especially if they work full-time and their only income is a salary taxed through PAYE. A return is usually required if you are self-employed and earn more than the ??1,000 trading allowance, if you are a company director receiving income not taxed under PAYE, or if you are part of a business partnership.
You must also file if you have foreign income, are a non-resident with taxable UK income,are a high earner, or receive rental income above the property allowance. A return may be necessary if you or your partner earn more than ??50,000 while claiming Child Benefit, if you want to claim employment expenses above ??2,500, or if you have untaxed savings income.
You must also report profits from selling property, shares, or other assets if these create a Capital Gains Tax liability. If you are unsure whether you need to file, HMRC provides an online tool, and a qualified accountant can offer further guidance.
If you are employed full-time and your only source of income is your salary, which is taxed under PAYE, it is unlikely you will need to submit one.
Contractors and self-assessments
Contractors and freelance professionals often have additional tax considerations. If you work as a contractor Outside IR35, your income likely comes from a combination of salary and dividends. In this case, self-assessment is necessary to declare your income and calculate the tax due.
For contractors working Inside IR35, it’s slightly more complicated as your income is usually taxed at source via PAYE. If you have additional sources of income or meet any of the other criteria above, then you’ll have to file a self-assessment. However, if your income is below the ??150,000 threshold, you have no other sources of income, and have been taxed entirely at source, you do not need to file.
Even if your income is above the ??150,000 threshold, you may not legally be obligated to file a tax return (see below for more detail).
What is a ‘notice to file’?
In some cases, HMRC issues a “Notice to File,” informing you of your obligation to submit a tax return. A notice to file is as it sounds, someone from HMRC (known as a ‘board officer’) sends you a notice informing you that you need to file a self-assessment tax return for that year.
This could be via letter, or it could be via email, depending on if (and how) you’ve previously filed in the past. The deadline to file is provided in the notice, and complying is mandatory. If you don’t then you may be subject to fines and penalties.
In most situations, if you meet the criteria to file a self-assessment tax return and HMRC haven’t sent you a notice to file, then you have a legal obligation to notify HMRC of your liability to tax. This is confirmed in paragraph SALF210 of the Revenue manuals where it says: “Any person who has not been required to complete a tax return, but who nonetheless has profits or chargeable gains on which tax is due must notify an officer of the board that they are chargeable to tax”.
For example, you have a new source of income, or your property income breached the threshold for the first time. Notification is done by registering for self-assessment.
If you do not do so by the relevant deadline (by 05 October following the end of the tax year on 05th April), you may be charged a ‘failure to notify’ penalty. This penalty is calculated as a percentage of potential lost revenue.
There is a specific exemption to the above, captured by TMA 1970, s 7(7) that says a person does not need to notify HMRC of their chargeability to Income Tax if: “all income from it for that year is [income on which] he could not become liable to tax under a self-assessment made under section 9 of this Act in respect of that year”.
This means that if a person submitted a self-assessment tax return, and no tax would be due, then they are not required to notify HMRC of their chargeability. Furthermore, failure to notify penalties are based on the potential lost tax revenue. Since no tax is due, penalties would be nil. Given that HMRC has not sent a notice to file, late penalty notices would not apply either.
However, there may be an issue if you think there is no tax owed, but HMRC do not agree (e.g you have incorrectly deducted expenses from your income that are not allowable).
In certain circumstances (say you earn over ??150,000 but don’t think you owe any tax), you may decide it’s better to be safe than sorry and file a tax return anyway.
It is also important to stress again that if HMRC have asked you to complete a return, you will still need to complete one. Once an individual has been issued with a notice to file, they have an obligation to file that return. It is not appropriate to ignore it on the basis that they believe no liability arises.
However, it is possible to ask HMRC to withdraw a notice to file after it has been issued. This is at HMRC’s discretion, although it is likely to be accepted if the taxpayer does not meet the normal criteria for being within self-assessment.
How to register for self-assessment?
There are different ways to register for self-assessment, depending whether you’re: (i) self-employed as a sole trader, (ii) not self-employed as a sole trader, or (iii) a partner or in a partnership.
• Sole Trader
HMRC provides detailed guidance on how to register for self-assessment as a sole trader here. If you’re self-employed as a sole trader, you need to register for both self-assessment and Class 2 National Insurance Contributions.
You register via your business tax account, known as Government Gateway.
If you do not have an account, you’ll be able to create one. You’ll get your Unique Taxpayer Reference (UTR) by post in 10 working days (21 days if you’re abroad). You should also receive a separate letter with an activation code.
Once you’ve received your UTR number and activation code, you can log in and activate your business tax account. Once you’ve done this, you should be able to add self-assessment and Class 2, and file your tax return.
• Note Self-Employed as a Sole Trader
HMRC provides detailed guidance on how to register for self-assessment if you’re not self-employed as a sole trader here. Those who are not self-employed as a sole-trader, and are required to register for self-assessment, need to do so using form SA1.
If you are a contractor, working Outside IR35 via a limited company, or Inside IR35 via an umbrella company, this is likely the option you need.
To register and complete the form (even if you decide to print it out and post), you’ll need to create a personal tax account via Government Gateway. Once you’ve submitted form SA1, you’ll get your UTR by post in 10 working days (21 days if you’re abroad). You should also receive a separate letter with an activation code.
Once you’ve received your UTR number and activation code, you can log in and activate your personal tax account. Once you’ve done this, you should be able to add self-assessment, and file your tax return.
• Partner or in a Partnership
HMRC provides detailed guidance on how to register for self-assessment if you’re a partner or in a partnership here. If you’re a partner or in a partnership, you need to register for both self-assessment and Class 2 National Insurance Contributions via form SA401.
If you’re the ‘nominated partner’, you must also register your partnership using form SA400. You’ll need your partnership’s UTR number to complete form SA401. You can complete the form online or print it out and post it to HMRC.
Self-assessment deadlines
It’s important to remember that your self-assessment tax return is submitted based on the tax year as opposed to the calendar year. The tax year runs from 06th April to 05th April the following year.
The 2025/2026 tax year runs from 06th April 2025 to 05th April 2026. You need to:
- Register for self-assessment by 05th October 2025 if you have never submitted a tax return before
- Submit your return by 31st October 2026 if filing a paper tax return
- Submit your return by 31st January 2027 if filing online
- Pay any tax owed by midnight on 31st January 2027
Failure to meet any of the above deadlines may results in penalty fees and interest on late payments.
How to pay
After submitting your self-assessment tax return, you will be informed of the amount of tax you need to pay, and HMRC provides guidance on how to make the payment. Tax is normally due on two key dates each year: 31 January for the previous tax year’s balancing payment and the first payment on account, and 31 July for the second payment on account.
You can set up a Budget Payment Plan if you prefer to make regular weekly or monthly payments towards your next tax bill. The amount you pay into the plan will be deducted from your next bill, reducing the amount due at the deadline. If the plan does not cover the full bill, you must pay the remaining balance, and if you have paid too much you can request a refund. You choose how much to pay and how often when creating the plan.
There are several ways to pay your tax bill, each with different processing times. Same-day options include online or telephone banking, CHAPS, debit or corporate credit card, and paying at a bank or building society. Payments taking around three working days include Bacs, existing Direct Debits, and cheques sent by post. A new Direct Debit generally takes five working days to be processed.
HMRC provide detailed guidance here.
Tax return services
If you are a limited company contractor and employ an accountant, they should be able to do your self-assessment tax return for you. If you don’t employ an accountant, there are many services that will do your tax-return for a one-off fee.
Of these services, TaxFix is the best I have come across. They charge ??134, and their platform interface is incredibly easy to use. I have no affiliation with TaxScouts beyond having used them myself previously. You can read reviews of their services here.