Tax
TL;DR
Self-assessment is the process by which HMRC collects income tax from people whose tax is not fully collected through PAYE. You must file a self-assessment return if you are self-employed, a company director, have income above £150,000, have untaxed income above £2,500, or have claimed Child Benefit with income above £60,000. The online return deadline is 31 January following the tax year end; the paper deadline is 31 October. Late filing triggers automatic penalties from £100.
Key facts (2026)
- The online self-assessment filing deadline for the 2024/25 tax year is 31 January 2026; the paper filing deadline is 31 October 2025 (HMRC self-assessment deadlines, 2025/26).
- Payment on Account: if your tax bill exceeds £1,000, HMRC requires two payments on account (POA) - each 50 percent of the prior year's liability - due on 31 January and 31 July; a balancing payment for any remaining liability is due the following 31 January (HMRC POA rules).
- The penalty for late filing is £100 immediately; after three months a further £10 per day (up to £900); after six months a further 5 percent or £300 (whichever is greater); penalties continue to accrue at twelve months (HMRC self-assessment penalties).
- HMRC's Making Tax Digital for Income Tax Self Assessment (MTD ITSA) requires self-employed individuals and landlords with income above £50,000 to keep digital records and submit quarterly updates from April 2026 (HMRC MTD ITSA guidance).
- The self-assessment time limit for amending a return is 12 months from the original filing deadline; HMRC can enquire into a return within 12 months of filing (or longer if there is suspected fraud or careless error) (HMRC enquiry and amendment rules).
Who must file a self-assessment return
HMRC requires a self-assessment return from anyone in the following circumstances: you are self-employed and your gross income from self-employment exceeds £1,000 in the tax year; you are a partner in a business partnership; you are a company director (unless the directorship is unpaid and the company is non-profit); your income from any source exceeds £150,000; you have untaxed income of more than £2,500 (such as rental income, savings interest above the PSA, or foreign income); you have capital gains above the annual exempt amount (£3,000 in 2025/26) from disposal of assets; you claimed Child Benefit and you or your partner had income above £60,000 in the tax year (High Income Child Benefit Charge); you have income from abroad; or you received a PAYE notice of Simple Assessment from HMRC that you wish to dispute. HMRC sends notice to file to known self-assessment taxpayers; if you become liable for the first time, you must register by 5 October following the end of the relevant tax year.
Key deadlines: filing, payment and payments on account
The tax year runs from 6 April to 5 April. For the 2024/25 tax year (6 April 2024 to 5 April 2025): the paper return deadline is 31 October 2025; the online return deadline is 31 January 2026; the first payment on account for 2025/26 is due on 31 January 2026 (alongside the 2024/25 balancing payment); the second payment on account is due 31 July 2026. Payment on Account applies when your previous year's tax bill exceeded £1,000 and at least 20 percent of that bill was not collected at source through PAYE. Each POA is 50 percent of the prior year's liability; if your current year liability is lower, you can apply to reduce the POA amounts, but if you reduce them below the correct amount, HMRC charges interest on the shortfall.
What income to include in the return
A self-assessment return must include all taxable income for the tax year from all sources. Employment income (if also employed, included as PAYE income already taxed but reported for completeness), self-employment profits (turnover minus allowable business expenses), rental income from UK or overseas property (net of allowable expenses, subject to the 20 percent cap on mortgage interest for residential lettings), savings and investment income above the personal savings allowance and dividend allowance, pension income and state pension income, foreign income, trust income, and capital gains from disposals of shares, funds, property or other assets above the CGT annual exempt amount. Expenses and reliefs that reduce the tax liability - pension contributions eligible for higher-rate relief, Gift Aid donations, professional subscriptions, capital allowances - are also included in the return. The tax return calculates the liability automatically from the figures entered; HMRC's system cross-checks against third-party data from banks, employers and other sources.
Self-employment expenses: what is and is not allowable
Self-employed individuals can deduct allowable business expenses from their trading income before calculating taxable profit. Allowable expenses include: business premises costs (rent, rates, utilities - but not the capital cost of purchasing property); stock and materials used in the business; business travel and vehicle expenses (not commuting from home to a regular place of work); staff costs including wages, NI and pension contributions; professional fees (accountants, solicitors, bank charges on business accounts); advertising and marketing; IT, software and equipment running costs; and training directly related to the current trade. Capital purchases (equipment, vehicles) are not deductible as an expense but may qualify for capital allowances including the Annual Investment Allowance, which allows 100 percent relief on qualifying plant and machinery purchases up to £1 million in 2025/26. Home working expenses are deductible on a proportionate basis where a room is genuinely used exclusively for business; HMRC publishes a simplified flat-rate method for small amounts.
Avoiding common self-assessment errors
The most common errors on self-assessment returns that attract HMRC enquiries or underpayment penalties are: omitting income from secondary employment or freelance work; incorrectly claiming expenses that are not wholly and exclusively for business purposes (mixed personal and business expenses); failing to declare foreign income or capital gains; incorrectly calculating rental profit by deducting mortgage capital repayments (only interest is deductible, and even that is now capped at 20 percent basic rate for residential property); claiming pension contributions for relief without the supporting contributions being made; and arithmetic errors in manually entered figures. HMRC's auto-population feature pre-fills some fields from employer and bank data reported to HMRC; check these pre-filled values against your own records before accepting them, as they can be incorrect or incomplete. Submitting by 31 January avoids the late filing penalty; paying by 31 January avoids the late payment penalty of 5 percent on outstanding amounts after 30 days.
MTD ITSA: the April 2026 digital records requirement
From April 2026, self-employed individuals and landlords with gross income above £50,000 must comply with Making Tax Digital for Income Tax Self Assessment (MTD ITSA). MTD ITSA requires: keeping digital records of income and expenses throughout the year; submitting quarterly updates to HMRC within one month of the end of each quarter (July, October, January, April); and filing an end-of-period statement and final declaration after the tax year end. The quarterly updates are not full tax returns; they report summary income and expense figures. Compatible MTD ITSA software must be used for these submissions. HMRC maintains a list of approved software on gov.uk. The extension to those with income above £30,000 is planned for April 2027. Traditional annual self-assessment for those above the MTD threshold is replaced - not supplemented - by the quarterly reporting regime; the final declaration serves the function of the old annual return.
Related guides
Frequently asked questions
Do I need to register for self-assessment if I am employed and pay tax through PAYE?
Only if you have income that is not fully taxed through PAYE. If you have self-employment income above £1,000, rental income, significant investment income, or if your total income exceeds £150,000, you must register for self-assessment even if you also pay PAYE tax. Registration must be completed by 5 October following the end of the relevant tax year. Register through your personal tax account on gov.uk.
What happens if I miss the 31 January deadline?
An automatic £100 penalty applies immediately for missing the 31 January online filing deadline, even if no tax is owed. Additional penalties of £10 per day apply after three months (up to £900 maximum), a further 5 percent or £300 after six months, and further penalties at twelve months. HMRC can waive penalties for a 'reasonable excuse' - genuine illness, bereavement, or HMRC system failure - but not for disorganisation or forgetting the deadline.
Can I reduce my payments on account?
Yes. If you expect your current year tax liability to be lower than the previous year, you can apply to reduce your payments on account by completing a SA303 form or through your personal tax account. If you reduce them below the correct amount, HMRC charges interest on the shortfall from the due dates. Reduction is appropriate when income has genuinely fallen; reducing them without justification creates an interest liability.
How far back can HMRC investigate my returns?
HMRC's standard enquiry window is 12 months from the filing date for a return filed on time. For carelessly incorrect returns, HMRC can enquire up to four years back; for deliberately incorrect returns, up to six years; and for offshore income or assets where fraud is suspected, up to 20 years. Keeping complete records for at least six years (seven years for companies) from the date of the relevant tax year is advisable.
I received a Simple Assessment letter from HMRC. What should I do?
HMRC issues Simple Assessments to people with untaxed income that it has been notified of (such as State Pension above the personal allowance or savings interest) who have not filed self-assessment returns. If you agree with the Simple Assessment, pay the amount stated by the deadline. If you disagree, you can challenge it within 60 days by filing a full self-assessment return for the relevant year, which replaces the Simple Assessment.
How we verified this guide
Self-assessment filing and payment deadlines were confirmed from HMRC's published self-assessment deadlines for 2024/25. Penalty amounts were confirmed from HMRC's self-assessment penalties guidance. MTD ITSA April 2026 commencement date and threshold were confirmed from HMRC's MTD ITSA guidance updated 2024. Payment on Account rules were confirmed from HMRC's POA guidance.
Primary sources
- HMRC - Self Assessment tax returns guidance
- HMRC - MTD ITSA guidance
- HMRC - Self Assessment filing deadlines
- MoneyHelper - Self-assessment guidance
- Citizens Advice - Self-assessment tax returns
Last reviewed: May 2026.