Do You Need To Do a Self Assessment?
- Adil Akhtar
- Jun 28
- 15 min read
Audio Summary of 15 Indicators You Should Consider Before Doing a Self-Assessment Tax Return in 2025-26:
Understanding Self Assessment – Do You Need to File in 2025-26?
So, you’re wondering whether you need to file a Self Assessment tax return for the 2025-26 tax year in the UK? Let’s cut to the chase: you’ll need to file if you have untaxed income (like self-employment earnings over £1,000), are a company director, or meet other specific HMRC criteria, but the rules have shifted recently, and it’s worth getting the full picture. The 2025-26 tax year, running from 6 April 2025 to 5 April 2026, comes with some new twists, like the removal of the £150,000 income threshold for PAYE taxpayers and upcoming Making Tax Digital (MTD) requirements. This section will break down who needs to file, why, and what’s changed, with a sprinkle of real-world context to keep it grounded.
What Is Self Assessment, and Why Does It Matter?
None of us love dealing with taxes, but Self Assessment is HMRC’s way of making sure you report and pay tax on income that isn’t automatically taxed through Pay As You Earn (PAYE), like wages or pensions. It’s essentially a form (SA100) where you declare your income, expenses, and any capital gains for the tax year, and HMRC calculates what you owe. For 2025-26, you’ll file your return after the tax year ends on 5 April 2026, reporting everything from self-employment profits to rental income. It’s not just about paying tax—it’s also about claiming reliefs (like charitable donations) or allowances (like the Marriage Allowance). Miss it, and you could face penalties, so let’s figure out if it applies to you.
Who Needs to File a Self Assessment in 2025-26?
Now, let’s get to the heart of it: do you need to file for 2025-26? HMRC has specific criteria, and meeting any one of these means you’re on the hook. Here’s the rundown, based on the latest rules as of June 2025:
Self-employed with income over £1,000: If you’re a sole trader or freelancer earning more than £1,000 (before expenses) in the 2025-26 tax year, you must file. If your income is £1,000 or less, you might still file to pay voluntary Class 2 National Insurance contributions for state pension eligibility.
Company directors: If you’re a director of a close company (one controlled by five or fewer people), you’ll need to report dividend income and your percentage shareholding, a new requirement starting 2025-26.
High Income Child Benefit Charge (HICBC): If you or your partner earn over £50,000 and receive Child Benefit, you may need to file to settle the charge.
Untaxed income: This includes rental income, dividends over £2,000, or savings interest above your Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate).
Capital gains: Sold a second home or shares and made a taxable gain? You’ll need to report it, even if you’ve already paid Capital Gains Tax (CGT) within 60 days for UK property sales.
Non-residents with UK income: If you’re not a UK resident but earn from UK property or land, you must file, even if there’s no tax to pay.
HMRC’s request: If HMRC sends you a notice to file, you must comply, even if you don’t owe tax. You can ask to cancel this if you don’t meet other criteria, but don’t ignore it.
15 Indicators You Should Consider Doing a Self Assessment Tax Return in 2025-26
Now, let’s wrap things up with a clear, practical guide to spotting when you need to file a Self Assessment tax return for the 2025-26 tax year. If you’re wondering whether your situation screams “time to file,” this section lists 15 key indicators that signal you should get started. These are tailored for UK taxpayers and business owners, drawing on the latest HMRC rules as of June 2025, with real-world context to make it relatable. Whether you’re a freelancer, landlord, or just someone with a side hustle, these signs will help you decide if Self Assessment is on your horizon.
Are You Self-Employed with Income Over £1,000?
Here’s the deal: if you’re self-employed and your gross income (before expenses) exceeds £1,000 in the 2025-26 tax year, you need to file a Self Assessment. This applies to freelancers, sole traders, or anyone running their own gig, like a plumber or graphic designer. For example, if Zara, a Leeds-based yoga instructor, earns £12,000 from private classes, she must file, even if her allowable expenses bring her taxable profit down.
Have You Started a New Business?
So, you’ve taken the plunge and launched a business in 2025? Congrats, but you’ll likely need to register for Self Assessment by 5 October 2025 to report your profits. This includes sole traders and partnerships. Take Rory, who started a dog-walking service in Glasgow. His £8,000 earnings mean he needs to file, and registering early ensures he gets his UTR number in time.
Are You a Company Director?
Now, consider this: if you’re a director of a close company (one with five or fewer shareholders), new HMRC rules for 2025-26 require you to report dividend income and your shareholding percentage via Self Assessment. Even if your dividends are under the £2,000 allowance, you’ll need to file. For instance, Meena, a director of a small tech firm in Cambridge, must report her £3,000 dividends.
4. Do You Earn Over £50,000 and Receive Child Benefit?
Be careful! If you or your partner earn over £50,000 and claim Child Benefit, the High Income Child Benefit Charge (HICBC) kicks in, requiring a Self Assessment to settle the tax. For example, if Tom in Birmingham earns £55,000 and his partner receives Child Benefit, he’ll need to file to calculate the charge, which starts at 1% of the benefit for every £100 over £50,000.
5. Do You Have Untaxed Savings or Investment Income?
Now, it shouldn’t surprise you that untaxed income, like savings interest above your Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 for higher-rate), needs to be reported. If Anwen, a Cardiff teacher, earns £600 in savings interest beyond her allowance, she’ll need to file a Self Assessment to declare it.
6. Are You Earning Rental Income?
Here’s a common one: if you’re a landlord with rental income from UK property, you must file a Self Assessment, even if the income is small. For example, Sanjay in London rents out a flat for £800/month (£9,600/year). He needs to report this, claiming allowable expenses like repairs to reduce his tax bill.
7. Have You Sold a Second Property or Shares?
Now, if you’ve sold a second home, investment property, or shares and made a taxable gain, Self Assessment is the way to report it. Even if you’ve paid Capital Gains Tax within 60 days (mandatory for UK property sales), you still need to include it in your return. For instance, Elspeth in Edinburgh sold a buy-to-let property in 2025 and must file to confirm her CGT calculations.
8. Are You a Non-Resident with UK Income?
So, the question is: are you living abroad but earning from UK sources, like rental income or selling UK property? You’ll need to file a Self Assessment, even if no tax is due. Take Lars, a Swedish expat who sold a UK flat in 2025. He must report the sale, even though he paid CGT within 60 days.
9. Do You Have a Side Hustle?
None of us want extra admin, but if you’re earning from a side hustle—like selling crafts on Etsy or driving for Uber—you may need to file if your income exceeds £1,000. For example, Nia in Swansea earns £2,500 from her online jewellery shop and must report it, even if it’s alongside her PAYE job.
10. Have You Received a Notice from HMRC?
Here’s a heads-up: if HMRC sends you a letter or email asking you to file a Self Assessment, you must comply, even if you think you don’t owe tax. You can request to be removed from the system if you don’t meet other criteria, but ignoring it risks a £100 fine. Check your HMRC Personal Tax Account to confirm.
11. Are You Claiming Tax Reliefs or Allowances?
Now, consider this: if you want to claim specific reliefs, like Gift Aid donations or pension contributions, Self Assessment is often the only way. For example, Idris, a Manchester nurse, donates £1,000 to charity and needs to file to claim higher-rate tax relief on his donations.
12. Do You Pay Voluntary National Insurance Contributions?
Be careful if you’re self-employed with low profits (below £1,000) but want to pay voluntary Class 2 National Insurance to qualify for the state pension. You’ll need to file a Self Assessment to make these payments. For instance, Cerys, a part-time writer in Cardiff, earns £800 but files to protect her pension entitlement.
13. Are You Involved in a Partnership?
So, if you’re a partner in a business, you must file a Self Assessment to report your share of profits, even if the partnership itself submits a separate return. For example, Tariq, a partner in a Bristol café, needs to declare his £15,000 share of the profits.
14. Do You Have Foreign Income or Gains?
Now, it’s worth noting that any foreign income or gains (e.g., overseas pensions, investments) must be reported via Self Assessment, even if taxed abroad. For instance, Elena, a retiree in Exeter with a Spanish pension, needs to file to declare her £5,000 foreign income.
15. Are You Preparing for Making Tax Digital (MTD)?
Here’s the kicker: if you’re self-employed or a landlord with income over £50,000, MTD starts from 6 April 2026, requiring quarterly digital updates. Filing a Self Assessment ensures you’re ready for this transition. Check HMRC’s guidance at www.gov.uk/government/publications/making-tax-digital to get started.
Summary of 15 Indicators You Should Consider Doing a Self-Assessment Tax Return in 2025-26
Self-Employed Income Over £1,000: If you earn more than £1,000 as a sole trader or freelancer, you must file to report your profits.
New Business Owner: Starting a business in 2025 means registering for Self Assessment by 5 October 2025.
Company Director: Directors of close companies must report dividends and shareholdings for 2025-26.
High Income Child Benefit Charge: Earning over £50,000 with Child Benefit triggers a filing requirement.
Untaxed Savings/Investment Income: Interest or dividends above your allowances need to be declared.
Rental Income: Any income from UK property rentals requires a Self Assessment.
Capital Gains: Selling assets like property or shares with taxable gains means you must file.
Non-Resident with UK Income: Income from UK sources, like property, requires reporting.
Side Hustle Earnings: Income over £1,000 from side gigs (e.g., Etsy, Uber) triggers a filing obligation.
HMRC Notice: A direct request from HMRC to file cannot be ignored.
Claiming Tax Reliefs: Reliefs like Gift Aid or pension contributions often require a Self Assessment.
Voluntary National Insurance: Low-income self-employed individuals may file to pay Class 2 contributions.
Partnership Income: Partners must report their share of business profits.
Foreign Income/Gains: Overseas income or gains must be declared, even if taxed abroad.
Preparing for MTD: Income over £50,000 as a sole trader or landlord means getting ready for quarterly digital updates.
Key Deadlines, Penalties, and Practical Steps for 2025-26
Now, if you’ve figured out that you need to file a Self Assessment for the 2025-26 tax year, the next question is: how do you actually get it done without tripping over deadlines or landing in hot water with HMRC? This section dives into the nitty-gritty of key dates, potential penalties, and a practical step-by-step guide to keep you on track. Plus, we’ll tackle the impact of Making Tax Digital (MTD) and how it’s shaking things up for sole traders and landlords. With real-world examples and up-to-date rules as of June 2025, let’s make sure you’re prepared.
What Are the Key Deadlines for 2025-26?
Be careful! Missing a Self Assessment deadline can cost you, both in stress and cash. For the 2025-26 tax year (6 April 2025 to 5 April 2026), HMRC has set specific dates you need to circle on your calendar. Here’s what you need to know, straight from GOV.UK:
5 October 2025: If you’re new to Self Assessment (e.g., you started freelancing in 2025), you must register with HMRC by this date to get your Unique Taxpayer Reference (UTR) number. This applies to sole traders, partners, or anyone else needing to file.
31 January 2026: For paper returns, this is the filing deadline. However, HMRC strongly prefers online submissions, as paper returns are slower to process and more prone to errors.
31 January 2027: The big one—online filing and payment deadline for your 2025-26 tax return. You must submit your return and pay any tax owed (Income Tax, National Insurance, or Capital Gains Tax) by midnight.
31 July 2026: If you owe tax and are on a “payment on account” system (common for self-employed people with tax bills over £1,000), the first instalment for 2026-27 is due by this date.
Miss these, and you’re looking at penalties—more on that next. Always check your deadlines via your HMRC Personal Tax Account at www.gov.uk/personal-tax-account to stay safe.
What Happens If You Miss a Deadline?
So, the question is: what’s the damage if you slip up? HMRC doesn’t mess around with late submissions or payments, and the penalties for 2025-26 are steep. Here’s a breakdown, based on HMRC’s latest guidance:
Issue | Penalty | Details |
Late Filing | £100 | Automatic fine if your return is late, even by a day, even if no tax is owed. |
3 Months Late | £10/day | Up to 90 days (£900 max) if your return is still not filed after 3 months. |
6 Months Late | 5% of tax due or £300 (whichever is greater) | Added on top of earlier penalties. |
12 Months Late | Another 5% or £300 (whichever is greater) | Plus possible tax-based penalties up to 100% of tax owed for deliberate errors. |
Late Payment | 5% of tax unpaid | Applied at 30 days, 6 months, and 12 months late, plus 4% annual interest on overdue tax. |
For example, let’s say Priya, a Bristol-based graphic designer, owes £2,000 in tax but forgets to file by 31 January 2027. She’d face a £100 fine immediately, then £10/day (up to £900) if she files three months late. If she still hasn’t paid her tax by 30 days after the deadline, she’d owe an extra 5% (£100). It adds up fast, so don’t let it snowball.
How Do You Register and File Your Self Assessment?
Now, consider this: if you’re new to Self Assessment, the process might feel like wading through treacle, but it’s manageable with a clear plan. Here’s a step-by-step guide to get you started, tailored for 2025-26:
Register with HMRC: By 5 October 2025, sign up via www.gov.uk/register-for-self-assessment. You’ll need your National Insurance number and details of your income sources. HMRC will send your UTR within 10 days (longer if you’re abroad).
Set Up Your Online Account: Activate your Government Gateway account (HMRC will provide a user ID). This lets you access the online Self Assessment portal.
Gather Your Records: Collect payslips, bank statements, invoices, and expense receipts for the tax year. If you’re self-employed, track allowable expenses (e.g., office costs, travel) to reduce your tax bill.
File Your Return: Log in to www.gov.uk/log-in-file-self-assessment-tax-return by 31 January 2027. The online form guides you through reporting income, expenses, and reliefs. Double-check figures to avoid errors.
Pay Your Tax: Use your UTR to pay via bank transfer, debit card, or set up a payment plan if you can’t pay in full. Do this by 31 January 2027 to avoid penalties.
Keep Records: Store all documents for at least 22 months after the tax year ends (or 5 years for businesses). HMRC can audit you, so stay prepared.
Take Ewan, a Cardiff-based electrician who started his own business in 2025. He registered by 5 October, used accounting software to track his £25,000 income and £5,000 expenses, and filed online by 15 January 2027. He paid his £4,800 tax bill on time, avoiding penalties and even claiming a £500 relief for new equipment. Simple record-keeping and early filing made it smooth.
How Does Making Tax Digital (MTD) Affect You?
Now, it shouldn’t be a surprise that Making Tax Digital is changing the game for 2025-26. From 6 April 2026, if you’re self-employed or a landlord with gross income over £50,000, you’ll need to keep digital records and submit quarterly updates to HMRC using MTD-compatible software (like FreeAgent or QuickBooks). This doesn’t replace your annual Self Assessment but feeds into it, ensuring HMRC has real-time data on your income.
For example, let’s meet Aisha, a Manchester landlord with two rental properties earning £60,000 annually. She’s gearing up for MTD by switching to digital records in 2025. Every quarter, she’ll submit income and expense summaries via software, which will pre-populate her 2025-26 Self Assessment, saving time. If your income is below £50,000, MTD kicks in from April 2027, but starting early can ease the transition.
What Are Some Common Pitfalls to Avoid?
Here’s the deal: even seasoned taxpayers trip up sometimes. Common mistakes include under-reporting income (e.g., forgetting side-hustle earnings from Etsy), claiming non-allowable expenses (like personal travel), or missing the registration deadline. If you’re a non-resident selling UK property, don’t forget to report within 60 days, even if you file a Self Assessment later. HMRC’s online checker at www.gov.uk/check-if-you-need-tax-return can confirm your obligations, but when in doubt, consult an accountant to avoid costly errors.
FAQs
Q1: What is the difference between Self Assessment and PAYE?
A1: Self Assessment is a system for reporting untaxed income, such as self-employment earnings or rental income, directly to HMRC, while PAYE (Pay As You Earn) is an automatic tax deduction system for employees’ wages managed by employers.
Q2: Can you file a Self Assessment if you’re employed under PAYE?
A2: Yes, individuals under PAYE may need to file if they have additional untaxed income, such as from a side hustle, rental properties, or dividends exceeding the allowance.
Q3: What happens if you don’t register for Self Assessment by the deadline?
A3: Failing to register by 5 October can lead to delays in receiving a UTR number, potentially causing late filing penalties if the return isn’t submitted on time.
Q4: How can you check if you’ve been overtaxed through Self Assessment?
A4: After filing, HMRC calculates the tax owed and compares it to payments made; any overpayment is refunded, which can be checked via the Personal Tax Account.
Q5: Can you file a Self Assessment early?
A5: Yes, filing can be done as soon as the tax year ends on 5 April, allowing taxpayers to plan payments or claim refunds sooner.
Q6: What is a UTR number, and why is it important?
A6: A Unique Taxpayer Reference (UTR) is a 10-digit number issued by HMRC to identify taxpayers, essential for filing returns and making tax payments.
Q7: Can you correct a mistake on a filed Self Assessment return?
A7: Yes, taxpayers can amend their return within 12 months of the filing deadline by logging into their HMRC online account or contacting HMRC directly.
Q8: What records should be kept for Self Assessment?
A8: Taxpayers should keep records of income, expenses, and receipts for at least 22 months after the tax year ends, or five years for businesses.
Q9: How does Self Assessment affect tax refunds?
A9: Filing a Self Assessment allows HMRC to identify overpaid tax, such as from incorrect tax codes, and issue refunds automatically or upon request.
Q10: Can you pay Self Assessment tax in instalments?
A10: Yes, taxpayers can set up a Time to Pay arrangement with HMRC if they can’t pay the full tax bill by the deadline, subject to approval.
Q11: What is the Personal Savings Allowance, and how does it relate to Self Assessment?
A11: The Personal Savings Allowance is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers; exceeding this requires reporting via Self Assessment.
Q12: How does Self Assessment work for partnerships?
A12: Each partner files an individual Self Assessment to report their share of partnership profits, while the partnership submits a separate return.
Q13: Can you claim expenses if you work from home?
A13: Self-employed individuals can claim a portion of home-related expenses, like utilities, as allowable business expenses on their Self Assessment.
Q14: What is the Trading Allowance, and who can use it?
A14: The Trading Allowance lets individuals earn up to £1,000 from self-employment or casual income tax-free without filing, but exceeding this requires a return.
Q15: How does Self Assessment apply to cryptocurrency gains?
A15: Taxable gains from selling or exchanging cryptocurrency must be reported on a Self Assessment, similar to other capital gains.
Q16: Can you file a Self Assessment if you have no tax to pay?
A16: Yes, individuals may need to file to report zero tax liability, claim reliefs, or confirm no tax is owed, especially if HMRC requests it.
Q17: What is the penalty for inaccurate Self Assessment returns?
A17: Inaccurate returns due to carelessness or deliberate errors can result in penalties up to 100% of the tax owed, depending on the severity.
Q18: How does Making Tax Digital integrate with Self Assessment?
A18: MTD requires quarterly digital updates for those with income over £50,000, which feed into the annual Self Assessment return for accuracy.
Q19: Can you appoint an accountant to handle Self Assessment?
A19: Yes, taxpayers can authorise an accountant to file on their behalf, but they remain responsible for ensuring accuracy and timely submission.
Q20: What happens if you stop being self-employed during the tax year?
A20: Individuals must still file a Self Assessment for the period they were self-employed, reporting any income earned before ceasing business.
About The Author:
Adil Akhtar, ACMA, CGMA, CEO and Chief Accountant of Pro Tax Accountant, is an esteemed tax blog writer with over 10 years of expertise in navigating complex tax matters. For more than three years, his insightful blogs have empowered UK taxpayers with clear, actionable advice. Leading Advantax Accountants as well, Adil blends technical prowess with a passion for demystifying finance, cementing his reputation as a trusted authority in tax education.
Email: adilacma@icloud.com
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