Self Assessment is the system HMRC uses to collect income tax from the self-employed, landlords, and anyone with untaxed income above £1,000.
Who Needs to File
You must complete a Self Assessment return if you:
- •Are self-employed (sole trader) earning more than £1,000
- •Are a partner in a business partnership
- •Earn rental income above £2,500
- •Have savings interest or dividends above HMRC thresholds
- •Have income over £100,000
Key Deadlines
- •5 April — end of tax year
- •31 July — second payment on account (if applicable)
- •31 October — paper return deadline
- •31 January — online return filing deadline AND payment of any tax owed
- •31 January — first payment on account for the following year (if your bill exceeds £1,000)
Missing the 31 January deadline attracts an automatic £100 fine, rising steeply with further delays.
What You Can Claim
Sole traders can deduct legitimate business expenses from their taxable income:
- •Office costs (stationery, equipment, software)
- •Travel and vehicle costs (mileage or actual costs)
- •Staff costs
- •Marketing and advertising
- •Professional fees (accountancy, legal)
- •Bank charges and interest on business loans
- •Training costs
- •A proportion of home working costs
You can also claim the Annual Investment Allowance (AIA) for capital purchases.
Payments on Account
If your tax bill is over £1,000, HMRC requires you to make advance payments — called payments on account — towards next year's bill. Each is 50% of your prior year's tax bill, due 31 January and 31 July.
This catches many new sole traders by surprise in their first year.
Getting Help
Self Assessment sounds straightforward but becomes complex once you factor in multiple income sources, capital gains, or pension contributions. We prepare your return, maximise your allowances, and make sure you never miss a deadline.