Self Assessment Tax Return: First-Timer’s Guide

Filing a self assessment tax return for the first time can feel overwhelming, but the process is more straightforward than most people expect once you know the steps. This guide is written for sole traders, freelancers, landlords and anyone else who needs to complete a return for the first time: walking you through registration, what information you need, how to calculate what you owe and the deadlines you must not miss.

• Who needs to file a self assessment tax return?
• How to register with HMRC
• Key deadlines you need to know
• What information you need before you start
• How to complete your tax return
• How much tax will you owe?
• Payments on account explained
• Common mistakes first-timers make
• Making Tax Digital and what it means for you
• Frequently asked questions

Who needs to file a self assessment tax return?

HMRC collects income tax from employees automatically through PAYE. Everyone else, or anyone with income that falls outside PAYE, needs to report it through self assessment. You must file a return if, in the 2025/26 tax year, any of the following applied to you:

• You were self-employed as a sole trader and earned more than £1,000
• You earned rental income as a landlord
• You earned income as a freelancer or contractor
• You received untaxed income from savings, investments or dividends above your allowances
• You earned over £100,000 in total income
• You received Child Benefit and either you or your partner earned over £60,000 (the High Income Child Benefit Charge applies above £60,000 of adjusted net income)
• You are a construction worker operating under CIS as a subcontractor
• You are a content creator earning income from social media, sponsorships or brand deals
• You sold assets and have a capital gains tax liability
• You received income from abroad

If you are unsure whether you need to file, HMRC has an online checker, or you can speak to an accountant. Filing when you do not need to is not the end of the world, but missing a filing obligation carries real penalties.

How to register with HMRC

Before you can file your first return, you need to register with HMRC. This is where first-timers often lose time, because the registration process has a lead time. HMRC posts your Unique Taxpayer Reference (UTR) number by letter, which can take up to 10 working days.

Registering as a sole trader

If you are self-employed, register using HMRC’s online service at gov.uk. You will need a Government Gateway account. Once registered, HMRC will send your UTR to your home address. You do not need to register separately for Class 2 National Insurance, because it has not been compulsory since April 2024.

Registering for other reasons

If you need to file because of rental income, capital gains or other untaxed income rather than self-employment, you register through a different section of the HMRC website: search for “register for self assessment” on gov.uk and select the option that matches your situation.

When to register

You must register by 5 October following the end of the tax year in which you had income to declare. So for the 2025/26 tax year (which ends 5 April 2026), the registration deadline is 5 October 2026. Miss this and HMRC can issue a penalty, though they tend to be more lenient with genuine first-time cases. Do not wait: register as soon as you know you need to.

Key deadlines you need to know

Missing a self assessment deadline triggers automatic penalties. There are no exceptions for first-timers. Write these dates down:

• 5 October: Deadline to register for self assessment (for the previous tax year)
• 31 October: Deadline to file a paper tax return
• 31 January: Deadline to file online and pay any tax owed. This is the main deadline most people work to
• 31 July: Deadline for the second payment on account (if applicable)

For the 2025/26 tax year, the online filing and payment deadline is 31 January 2027. Miss it and HMRC charges an immediate £100 penalty, with further daily penalties if the return remains outstanding for more than three months.

What information you need before you start

Gather everything before you log into HMRC’s online portal. Trying to find figures mid-way through the return wastes time and increases the chance of errors. Here is what you typically need:

• Your UTR number and National Insurance number
• Your Government Gateway login details
• Records of all self-employment income (invoices, bank statements, accounting records)
• A list of all allowable business expenses
• P60 or P45 from any employed work during the year
• Bank interest statements (your bank can usually provide a year-end summary)
• Dividend statements if you own shares
• Records of any rental income and costs if you are a landlord
• Details of any pension contributions
• Gift Aid donations (these can increase your tax relief)

Good bookkeeping throughout the year makes this part straightforward. If you have kept clear records of income and expenses, pulling together the figures takes very little time.

How to complete your tax return

Log in to your Government Gateway account and navigate to your self assessment return. HMRC’s online system guides you through a series of sections. You only need to complete the ones relevant to your income sources. Here is what the key sections cover:

Employment income

If you were also employed during the year, enter your gross pay and tax paid from your P60. HMRC will already have some of this information, but you still need to enter it yourself.

Self-employment pages

This is where you report your business income and expenses. You have two options: simplified cash basis (good for most sole traders with straightforward finances) or traditional accruals accounting. Under the cash basis, you record money when it is received and paid, not when it is invoiced or billed.

Allowable expenses you can deduct include:

• Office costs, stationery and phone bills
• Travel and mileage (using HMRC’s simplified mileage rates of 55p a mile for the first 10,000 miles and 25p after that in 2026/27)
• Marketing and advertising costs
• Professional fees and accountancy costs
• Equipment and tools used for the business
• A proportion of home costs if you work from home
• Stock and materials used in the business

You cannot deduct personal expenses, entertainment or the portion of any cost that is personal rather than business use.

Property income

If you earn rental income, complete the UK property section. You can deduct allowable costs such as letting agent fees, repairs and maintenance, insurance and mortgage interest (subject to restrictions for residential landlords: a tax credit applies rather than a full deduction). Mortgage interest is not deducted from rental profit. Instead, you receive a tax credit worth 20% of the interest.

Other income

Report bank interest, dividends, capital gains and any other taxable income in the relevant sections. The dividend allowance in 2026/27 is £500. Anything above that is taxable at 10.75%, 35.75% or 39.35% depending on your tax band. Capital gains have an annual exempt amount of £3,000 in 2026/27.

How much tax will you owe?

HMRC’s system calculates your tax bill automatically once you have entered all your figures. But understanding the calculation helps you plan ahead.

In 2026/27, the rates are:

• Personal allowance: £12,570, no tax on income up to this level
• Basic rate: 20% on income between £12,571 and £50,270
• Higher rate: 40% on income between £50,271 and £125,140
• Additional rate: 45% on income above £125,140

As a self-employed person, you also pay National Insurance. In 2026/27, Class 4 NI is 6% on profits between £12,570 and £50,270 and 2% above that. Class 2 NI is no longer compulsory, but you can pay it voluntarily if your profits are below the small profits threshold.

Your total tax bill is the sum of income tax and National Insurance owed, minus any tax already paid (for example, through PAYE if you were also employed).

Payments on account explained

This catches a lot of first-time filers off guard. If your tax bill for the year is more than £1,000 and less than 80% of your tax was collected at source (i.e. through PAYE), HMRC requires you to make advance payments towards next year’s bill. These are called payments on account.

Each payment on account is 50% of your current year’s tax bill. You pay the first on 31 January (at the same time as settling your current year’s bill) and the second on 31 July. This means your first self assessment payment can be 150% of what you expected. Your actual tax bill plus the first payment on account.

For example: if your 2025/26 tax bill is £3,000, you pay £3,000 by 31 January 2027, plus a first payment on account of £1,500, making a total of £4,500 due in January. Plan for this from the start by setting money aside throughout the year.

Common mistakes first-timers make

Most errors on a first self assessment return are avoidable. Watch out for these:

• Registering too late. Missing the 5 October registration deadline can cause a rush and potential penalties.
• Forgetting expenses. Many sole traders under-claim on allowable expenses, which means they pay more tax than necessary.
• Mixing personal and business finances. Keep a separate bank account for business transactions. It makes record-keeping far simpler.
• Ignoring the payment on account surprise. Budget for it from day one of trading.
• Entering the wrong bank details for a tax refund. HMRC will process a refund if you have overpaid: make sure your bank account details are correct in the system.
• Not keeping records. HMRC can investigate returns for up to 12 months after filing (or longer in cases of suspected fraud). Keep all receipts and records for at least five years after the 31 January filing deadline.
• Failing to include all income sources. Every source of taxable income must be declared, including side income, interest and dividends.

Making Tax Digital and what it means for you

Making Tax Digital (MTD) for Income Tax Self Assessment has started. Since 6 April 2026, self-employed people and landlords with qualifying income over £50,000 have had to use compatible software to keep digital records and send quarterly updates to HMRC, then file a final tax return after the year end. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.

If your income is approaching or above that threshold, now is the time to start using accounting software such as Xero. Our bookkeeping service can set Xero up correctly and keep it current, so there is no scramble when the rules change. MTD will eventually extend to those with income over £30,000 in April 2027, so even if you are below the initial threshold, the change is coming.

Frequently asked questions

What is the deadline for filing my first self assessment tax return?

The deadline to file online is 31 January following the end of the tax year. For the 2025/26 tax year, that is 31 January 2027. You must also register by 5 October 2026 if you have not already done so.

What happens if I miss the self assessment deadline?

HMRC charges an automatic £100 penalty if your return is filed late, even if you owe no tax. Penalties increase after three months (daily charges of £10 apply, up to a maximum of £900), and further penalties apply after six and twelve months. Interest also accrues on any unpaid tax from the 31 January deadline.

Do I need an accountant to do my first self assessment?

You are not legally required to use an accountant, but many people find the process easier and less stressful with professional help, particularly if you have multiple income sources, are unsure about expenses or want to make sure you are not overpaying. An accountant can often save more in tax than their fee costs.

What expenses can I claim as a sole trader?

You can claim any expense that is wholly and exclusively for your business. Common examples include business mileage, office costs, professional subscriptions, software, marketing and a proportion of home costs if you work from home. You cannot claim personal expenses or entertainment costs.

What is a UTR number and where do I find it?

A UTR (Unique Taxpayer Reference) is the 10-digit number HMRC issues when you register for self assessment. It is printed on letters from HMRC and is visible in your Government Gateway account. You need it every time you deal with HMRC about your tax return.

Can I file a self assessment return if I am also employed?

Yes. Being employed through PAYE does not prevent you from also filing a self assessment return. If you have additional income (such as self-employment, rental income or significant savings interest) you must declare it via self assessment even if you pay income tax on your salary through your employer.