Self Assessment doesn’t have to be the dreaded January scramble it is for a lot of people. The system is largely mechanical: HMRC publishes the deadlines, the rules don’t change much from year to year, and most of the work is gathering the right documents in one place.
The main change for 2026/27 is the start of Making Tax Digital for Income Tax, which from 6 April 2026 has brought sole traders and landlords with qualifying income above £50,000 into a new quarterly reporting regime. The thresholds tighten further in following years.
This guide walks through who needs to file a Self Assessment return, what you’ll need to prepare, the figures and expenses to include, and the deadlines that decide whether you walk away clean or pick up a penalty.
Who Needs to File
Self Assessment isn’t just for the self-employed. You’ll usually need to file a return if any of these apply in the 2025/26 tax year (the one you’ll be filing by 31 January 2027):
- Self-employed earnings over £1,000: The trading allowance covers casual earnings up to £1,000. Above that, registration and a return are required.
- Rental income over £1,000: Same threshold for property income. The £7,500 Rent a Room allowance covers furnished lettings in your own home.
- Company directorships: Directors may need to file if they have untaxed income, dividends, benefits in kind, director’s loan issues, or HMRC has issued a notice to file. Holding a directorship alone doesn’t automatically mean a return is required.
- Income over £100,000: Once your income passes the £100,000 Personal Allowance taper, a return is often needed so HMRC can calculate the allowance withdrawal correctly. Use HMRC’s online checker if PAYE has already collected the tax.
- Untaxed income: Foreign income, savings interest above the Personal Savings Allowance, dividends above the £500 allowance, capital gains above the £3,000 annual exempt amount, or – if you’re already in Self Assessment – disposals with total proceeds above £50,000 even where the gain itself is covered by the allowance.
The government has announced that the reporting threshold for trading income will rise from £1,000 to £3,000 during this Parliament, with a simplified online service for earnings between £1,000 and £3,000. The change isn’t yet in force – the £1,000 threshold still applies for the return you’re filing now.
Worth knowing: digital platforms have had to collect seller information from 2024 and report it to HMRC by the following January, so HMRC may already receive data from platforms such as Etsy, eBay, Vinted, Airbnb and Uber.
If you’ve sold significantly on those platforms, HMRC may already receive data about your platform income, although you’ll still need to work out whether any taxable profit has arisen.
What You’ll Need Before You Start
Pulling these together at the start saves hours of digging later:
- Your UTR (Unique Taxpayer Reference): The 10-digit number HMRC uses to identify you. It’s on previous return correspondence or in your Government Gateway account.
- Government Gateway login: Without it, you can’t file online. Resetting a forgotten password takes a few days, so check now if you’re not sure.
- Income records: P60s (employment), P11Ds (benefits in kind), invoices (self-employment), rent statements, dividend vouchers, savings interest summaries.
- Expense records: Receipts, invoices, mileage logs, bank statements, software subscription confirmations.
- Pension and Gift Aid documentation: Anything that reduces your tax bill needs evidence.
Bank statements covering the full tax year are particularly useful – they’re the cross-reference HMRC uses if a return gets queried later.
Reporting Your Income
The complexity of your return depends on how many income sources you have. The main categories:
Self-Employment
If you’re a sole trader, include all income from your business – every payment received, whether by cash, bank transfer, PayPal, Stripe or a marketplace platform. Income is reported gross, with allowable expenses deducted to give your taxable profit.
You can choose between the cash basis (income and expenses based on when money moves) and the accruals basis (when invoices are raised). For most small businesses, cash basis is simpler and is now the default. You can opt out if you’d prefer accruals.
Property
Rental income is reported on the property pages of the return. Key points:
- Gross rent received: From all properties, including any periods where rent was paid in advance.
- Allowable expenses: Repairs (not improvements), letting agent fees, insurance, ground rent, service charges and similar costs of running the property.
- Mortgage interest: Restricted to a 20% basic-rate tax credit since 2020 – not a deduction from rental profit. Higher-rate landlords feel this most.
- Empty periods: Report void periods if you want to claim the related expenses.
Different rules apply for short-term holiday lets following the abolition of the Furnished Holiday Lettings regime from April 2025.
Company Directors
Directors may need to file, depending on how they take money, whether they have untaxed income or benefits, and whether HMRC has issued a notice to file. The return needs to include:
- Salary from the company: Reported on your P60.
- Dividends taken in the tax year: Counted by date of payment, not by the year the profit was earned. Dividend vouchers are the evidence.
- Benefits in kind: Private medical insurance, company cars, loans above £10,000 – all reported on P11D and brought into the return.
- Director’s loan account movements: Particularly anything overdrawn at year-end, which can trigger separate tax consequences.
Our optimal director’s salary guide covers the wider planning around this.
High Earners
Once total income passes £100,000, the Personal Allowance starts tapering – losing £1 of allowance for every £2 of additional income, fully gone at £125,140. The effective marginal rate between those two figures is 60% (62% for employment income).
If you’re near the threshold, pension contributions and Gift Aid donations reduce your adjusted net income and can restore the allowance. Our Personal Allowance guide covers the planning routes in more detail.
Allowable Expenses
The basic rule is that expenses must be “wholly and exclusively” for business or rental purposes. The categories that commonly come up:
Self-Employed
- Office costs: Stationery, software subscriptions, phone bills (business portion only), professional fees.
- Travel: Business mileage at 45p per mile for the first 10,000 miles, 25p thereafter. Train tickets to client meetings, hotel stays for business trips, parking at client sites. Ordinary commuting isn’t claimable.
- Working from home: A proportion of household running costs based on rooms used and time worked, or HMRC’s simplified flat rates depending on hours worked per month.
- Capital purchases: Computers, equipment and machinery normally go through capital allowances rather than ordinary expenses, with the Annual Investment Allowance covering up to £1 million of qualifying spend.
Landlord
The repairs versus improvements distinction is where landlords most often slip up. Repairs that restore the property attract relief. Improvements that enhance value don’t – they get added to the property’s base cost for Capital Gains Tax when you eventually sell.
Allowable property expenses include:
- Letting agent fees and management costs
- Insurance and ground rent
- Repairs that maintain the property (replacing broken boilers, fixing leaks, repainting)
- Replacement of Domestic Items relief for like-for-like furniture and appliance replacements in furnished lets
MTD for Income Tax: The Big Change for 2026/27
This is the biggest structural change to Self Assessment in years. From 6 April 2026, self-employed people and landlords with qualifying income above £50,000 have to:
- Keep digital records in compatible software
- Send quarterly updates to HMRC on income and expenses
- Submit a tax return after the end of the tax year, including any other income and final adjustments
HMRC assesses qualifying income from your filed Self Assessment returns, so the 2026/27 start is based on previously reported self-employment and property income rather than a guess at what you might earn during 2026/27.
The threshold drops to £30,000 from April 2027 and £20,000 from April 2028, bringing far more sole traders and landlords into the regime over time.
For 2026/27, HMRC is running a soft landing on the new penalty regime – no points for late quarterly updates in the first year, although late end-of-year declarations and payments still attract penalties.
If your qualifying income is below £50,000 for 2025/26, the standard annual Self Assessment process still applies for now. But the direction of travel is clear: by April 2028, most sole traders and landlords above £20,000 will be in MTD.
Deadlines and Penalties
The headline dates for the 2025/26 tax year are:
- 5 October 2026: Register for Self Assessment if you’re filing for the first time.
- 31 October 2026: Paper return deadline.
- 31 January 2027: Online return deadline, balancing payment due, and first payment on account for 2026/27.
- 31 July 2027: Second payment on account for 2026/27.
Penalties start automatically:
- £100 immediately at one day late, even if you owe no tax
- £10 per day after three months, capped at £900
- The greater of £300 or 5% of the tax due at six months, with another round at twelve months
Payments on account apply if your tax bill is over £1,000 and less than 80% was collected through PAYE. Each instalment is half of last year’s bill, paid in January and July as an advance against the current year.
Late payment interest is currently 7.75% (Bank of England base rate plus 4%, as of 9 January 2026). It runs from the due date until the tax is paid in full.
A Quick Pre-Submission Checklist
Before hitting submit, run through:
- Compare against last year’s return: Big income changes can flag HMRC’s attention. If something has changed legitimately, the explanation is easier to give now than later.
- Cross-check figures against records: Bank statements, P60s and dividend vouchers should match what you’ve entered.
- Check your tax code: A wrong code is one of the more common reasons people overpay or underpay. Now is the moment to spot it.
- Confirm payment on account position: If your bill is over £1,000, you may owe two payments next year as well.
Save a PDF of the submitted return and tax calculation for your records.
How Double Point Can Help
Most penalty notices are entirely avoidable, and most overpaid tax is recoverable if it’s caught early. The cost of doing Self Assessment properly – with all reliefs claimed and the figures cross-checked – is normally a fraction of what one missed deadline or claimable expense can cost.
At Double Point, our chartered accountants handle Self Assessment for sole traders, landlords, directors and high earners across the UK – from gathering records and identifying overlooked reliefs to filing on time and managing HMRC queries.
Book a free consultation and we’ll review your position for 2025/26 well before the January 2027 deadline.