If you are self-employed in the UK, you are responsible for working out and paying your own income tax and National Insurance. HMRC uses a system called Self Assessment for that. This guide walks through the whole process in order, with the main rates and dates. It is general information based on the rules for England, Wales and Northern Ireland (Scottish income tax rates differ), so confirm figures on GOV.UK or ask an accountant.
Who needs to file a return?
You usually must file a Self Assessment tax return if you were self-employed and earned more than £1,000 in gross income (before expenses) in the tax year, or you have other income such as rental income or certain investment income. Some people with simple affairs are asked to file for other reasons too. If you are unsure, check the GOV.UK tool or ask HMRC.
The tax year
The tax year runs from 6 April to 5 April. The 2026/27 tax year began on 6 April 2026 and ends on 5 April 2027. Your return for 2026/27 would normally be due by 31 January 2028, although Making Tax Digital for Income Tax changes this for some people.
Step 1: register with HMRC
If you are new to self-employment, register for Self Assessment by 5 October after the end of your first tax year. You will receive a Unique Taxpayer Reference (UTR) and an activation code, which you use to sign in to your online account.
Step 2: keep your records
Record every sale and every business cost as it happens. You need to keep the records for at least five years after the 31 January filing deadline. See our bookkeeping guide for a simple routine.
Step 3: work out your profit
Your taxable profit is your income minus your allowable expenses. Alternatively you can use the £1,000 trading allowance in place of actual expenses, if your gross income is small. You cannot do both. Our guide to allowable expenses explains what you can claim.
Step 4: how your tax is calculated
For 2026/27 (England, Wales and Northern Ireland) the main income tax rates are:
- Personal allowance: the first £12,570 of income is tax-free (reduced by £1 for every £2 of income above £100,000).
- Basic rate, 20%: on income up to £50,270.
- Higher rate, 40%: on income from £50,270 to £125,140.
- Additional rate, 45%: on income above £125,140.
As a self-employed person you also pay Class 4 National Insurance: 6% on profits between £12,570 and £50,270 and 2% on profits above £50,270. Class 2 National Insurance is no longer a compulsory charge for most people. Rates and thresholds can change at Budgets, so check GOV.UK. Try our self-employed tax calculator for an estimate.
Step 5: file the return
You can file online through your HMRC account any time after the tax year ends, and the sooner the better. Enter your income, expenses and any other details, check the calculation and submit. Keep the confirmation.
Step 6: pay your tax
Payment is due by 31 January after the end of the tax year. If your bill is above a certain amount you also make payments on account: advance payments towards next year’s tax, due on 31 January and 31 July, each usually half of the previous year’s bill. The first time you pay them, the January bill can be around one and a half times what you expected, so set money aside through the year. Pay HMRC using its published account details and your reference.
Deadlines at a glance
- 5 October: register if you are new.
- 31 October: paper return deadline.
- 31 January: online return deadline and payment deadline.
- 31 July: second payment on account.
See the Self Assessment deadlines and checklist for the current dates.
Penalties
Filing late brings an automatic penalty, currently £100, and more the longer the return is outstanding. Paying late adds interest and further penalties. Filing and paying early avoids all of this.
Making Tax Digital for Income Tax
If your qualifying income is above HMRC’s threshold you move to quarterly updates and a final declaration instead of an annual return. See our Making Tax Digital guide and the deadlines for 2026 to 2028.
Tips to make it easier
- Set aside a percentage of every payment for tax.
- Keep business and personal money separate.
- Reconcile your bank monthly.
- File early, even if you cannot pay in full yet, and contact HMRC if you need a payment plan.
- Ask an accountant if your situation is more complicated.
How AvrioBooks helps
With invoices, expenses and your bank in one place, your profit for the tax year is a report away. Export a profit and loss for 6 April to 5 April to PDF, Excel or CSV and use it for your return or send it to your accountant. See AvrioBooks for sole traders.
Frequently asked questions
Do I need to file a Self Assessment return?
Usually yes if you were self-employed and your gross income was above £1,000 in the tax year, or you have other income that needs reporting. Check GOV.UK if you are unsure.
When is the Self Assessment deadline?
31 January after the end of the tax year, for both filing online and paying. A paper return is due by 31 October.
What are payments on account?
Advance payments towards next year's tax bill, usually due on 31 January and 31 July, each normally half of the previous year's bill.
Does Making Tax Digital replace Self Assessment?
For people in scope it replaces the annual return with quarterly updates and a final declaration. Tax payment dates stay the same.
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