A Starter's Guide to Self-Assessment Tax Returns

When you’re employed, tax is usually sorted for you behind the scenes. You get your payslip, tax is taken off, and you don’t really think twice about it.

But when you work for yourself — whether as a sole trader, freelancer, landlord, or company director — things change. You’ll need to file a Self-Assessment tax return and take charge of your own tax affairs.

Sounds scary? Don’t worry — we’re about to break it all down into easy, bite-sized steps.

What Is Self-Assessment?

Self-Assessment is just HMRC’s way of collecting Income Tax and National Insurance from people who don’t have it automatically deducted through PAYE.

You’ll need to complete a tax return once a year, showing what you earned and what expenses you had, then pay the tax due.

Your Income Tax liabilities are calculated based upon your total income from all taxable sources, which means you need to include all taxable income in your tax return.

Who Needs to File One?

You’ll probably need to submit a tax return if you:

• Are self-employed and earned more than £1,000

• Are a partner in a business partnership

• Are a company director and received untaxed income (like dividends)

• Have rental income

• Have capital gains (e.g. from selling property or shares)

• Have foreign income, investment income, or other untaxed income

Not sure if it applies to you? Check HMRC’s online tool or ask an accountant.

Self-Assessment Timeline: Key Dates

What You Need to Do	Deadline
Register for Self-Assessment	5 October (in your second tax year)
File your tax return (online)	31 January (after the tax year ends)
Pay any tax owed	31 January
Make a second payment on account (if required)	31 July

How to File Your Return, Step-by-Step

Step 1: Register with HMRC

If you have never filed a tax return and meet the criteria, you’ll need to register for Self-Assessment.

• Do it online at gov.uk/register-for-self-assessment. You can also check here whether you need to register and file a return.

• HMRC will send your Unique Taxpayer Reference (UTR) by post

• You’ll then be able to access your HMRC online account

Do this by 5 October after the relevant tax year.

Step 2: Gather Your Info

You’ll need:

• Your UTR and National Insurance number,

• Records of all your income,

  • Self-employed profits

  • Employment income (if applicable)

  • Bank interest, dividends, rental income, etc.

• Details of any expenses you want to claim,

• P60, P45 or P11D if you had employment,

• Any pension contributions, charitable donations or details of other available reliefs.

Keep your records organised all year — it makes this bit much easier.

Step 3: Log In and Start the Return

Go to: www.gov.uk/log-in-file-self-assessment-tax-return

• Log into your HMRC account

• Choose the relevant tax year

• Work through each section, one at a time

• Declare all income, claim your expenses, and double-check figures

Don’t worry — you can save and come back later.

Step 4: Check and Submit

HMRC will show a summary of the tax you owe.

• Check everything carefully

• Make sure your bank details are correct (for refunds!)

• Submit by midnight on 31 January

Once submitted, you’ll get a confirmation and reference number.

Step 5: Pay Your Tax Bill

Payment is due by 31 January — the same day the return is due.

Ways to pay:

• Bank transfer

• Direct debit

• Online card payment

• Through your HMRC account

If you owe more than £1,000, you may also need to make Payments on Account (advance payments towards next year’s bill).

What Are Payments on Account?

If your tax bill is over £1,000 and less than 80% of your tax is collected at source (e.g. via PAYE), HMRC will ask for two advance payments:

Payment	Due Date
First Payment on Account	31 January
Second Payment on Account	31 July

Each payment is 50% of your previous year’s tax bill.

These are offset against next year’s tax. If your income drops, you can request to reduce them.

For example, if you have a tax liability to pay for 2024/25 of £2,000 and need to make payments on account, the first payment on account will be £1,000 and is due at the same time (31st January) as the £2,000 payment for 2024/25. The second payment on account of £1,000 would be due by 31 July. When you come to complete your return the following year, you deduct the two payments already made of £1,000 each.

What Happens If You Miss the Deadline?

• £100 late filing penalty for missing the 31 January filing deadline

• Daily penalties of £10 per day after 3 months passed the filing deadline

• Interest and fines on late payments

The later you leave it, the more it costs. Set reminders and give yourself plenty of time.

Common Self-Assessment Mistakes to Avoid

• Forgetting to register

• Missing income (especially bank interest, rental income, dividends)

• Claiming ineligible expenses

• Not keeping records

• Leaving it until 30 January!

Final Thoughts

Filing a tax return might sound daunting, but once you’ve done it once, it becomes a lot easier. The key is:

• Keep your records organised

• Don’t leave it to the last minute

• Ask for help if you need it

Need a hand with your tax return?

Let Purcell's Accountancy Ltd take the stress off your shoulders — we’ll make sure everything’s done correctly, on time, and with no nasty surprises.