How to file a self-assessment tax return: A guide for UK small businesses

Data from HMRC revealed that over 11.5 million taxpayers submitted their self-assessment tax returns by the 31 January deadline for the 2023 to 2024 tax year, with over 31,000 people leaving it until 11-11:59pm on the day. 

But understanding how to navigate this isn’t as simple as filling in a form and hoping for the best — and definitely not one to leave until the final hour.

Whether you are a newly self-employed freelancer or a long-standing business owner, we’ll walk you through the basics of completing a self-assessment so you can start the year stress-free.  

Our updated guide for 2026 ensures you have the most up-to-date information for the upcoming January deadline, plus everything you need to know about the new Making Tax Digital scheme, which launches in April 2026.

What is a self-assessment tax return?

Self-assessment is the system HM Revenue and Customs (HMRC) uses to collect income tax and National Insurance. While employees usually have their taxes deducted automatically from their wages via PAYE, self-employed people and businesses with other sources of income must report them themselves.

A self-assessment tax return is a digital or paper form where you declare your total earnings and any allowable business expenses to HMRC. HMRC then uses these figures to calculate exactly how much income tax and National Insurance you need to pay.

For most, this has been a yearly task. However, it’s important to know that the reporting system is about to undergo a big change.

Self-assessment is changing to Making Tax Digital 

While the 31 January 2026 deadline will still use the traditional self-assessment method, a new government scheme called Making Tax Digital (MTD) for Income Tax is set to launch on 6 April 2026.

MTD changes the tax return process, and sole traders and the self-employed must use a digital system to report their earnings to HMRC. It’s part of HMRC’s plan to modernise the UK tax system by replacing the single annual assessment with a more frequent, digital-first approach.

The move to MTD is being rolled out in stages based on your total turnover before expenses:

• From 6 April 2026 — MTD will be mandatory for sole traders and landlords with a qualifying income over £50,000 for the 2024/25 tax year.
• From 6 April 2027 — MTD will be enforced for those with a qualifying income over £30,000 for the 2025/26 tax year.

If your income is over £20,000 for the 2026/27 tax year, the government has set out plans to introduce legislation that will lower the qualifying income threshold. It’s possible that MTD will be expanded for sole traders with an income over £20,000 from April 2028.

However, if you fall into the first two categories, the old once-a-year tax return will be replaced by three new requirements:

1. Digital record keeping
   You must use MTD-compatible software to keep digital records of every business transaction.
   
   
2. Quarterly updates
   Every three months, you will send a summary of your income and expenses to HMRC directly from your software.
   
   
3. Final declaration
   You will still submit a final digital declaration by 31 January to finalise your tax for the year.

This means that the 31 January 2026 will be the last self-assessment tax return completed in the traditional method for small businesses earning over £50,000 a year. If your business makes less than £50,000 before expenses, you can continue to file a self-assessment tax return until the year when it’s enforced for your qualifying bracket.

When does the tax year start and end in the UK?

Unlike the calendar year, the UK tax year always runs from 6 April to 5 April the following year. 

Each self-assessment looks back at the previous tax year, so when you complete your form, it should include all your earnings and allowable expenses from the 12-month period that has just finished.

Think of it as having a 10-month window from the end of a tax year (5 April) to get your records in order, file your return, and pay your bill by the following January.

• The filing year (2024/25) — The tax return due by 31 January 2026 covers the period from 6 April 2024 to 5 April 2025.
• The current tax year (2025/26) — This started on 6 April 2025 and will end on 5 April 2026. You won't usually file the return for this period until January 2027.

Do I need to do a self-assessment?

Not every small business owner needs to file a return, but many do. You usually need to register and file a return if any of the following applied to you in the 2024/25 tax year:

• You were self-employed or a sole trader and your total income across the year was over £1,000.
• You earned over £1,000 in income from renting out a property or land.
• You earned over £10,000 from savings interest, investments, or dividends.
• You earned over £2,500 from tips, commissions, freelance work, or side hustle profits.
• You have to pay Capital Gains Tax.
• You received income from abroad.
• You received income from a trust.
• You were a partner in a business partnership.

In previous years, if you earned over £150,000, you were automatically required to file a return even if your tax was already paid through PAYE. This is because you were classed as a ‘high earner’.

For the 2024/25 tax year, this income-only threshold has been removed. If your only source of income is from a job where tax is deducted via PAYE and you have no other reason to file (like the ones listed above), you likely no longer need to complete a return. 

HMRC should have written to you if you are being removed from the system, but if you're unsure, it’s always recommended to check your status directly with them to avoid any ‘failure to notify’ penalties.

When to register for self-assessment

If you’re new to self-employment or have untaxed income for the first time, it’s not quite as simple as logging in and filing a return; you first need to register with HMRC to tell them you are now part of the system, and then the deadline to submit your self-assessment form is a bit later. The deadline to register for self-assessment is 5 October following the end of the tax year. 

Here are all the key deadline dates to know:

• Register for self-assessment — You must register for self-assessment by 5 October following the end of the tax year in which you met the criteria.
• Paper tax returns — If you’re filing a paper return, this must be submitted by midnight on 31 October. 
• Online tax returns — For online tax returns, you’ll have a bit longer, until midnight 31 January to submit.
• Tax payment — You must pay all the tax that you owe by 31 January.

How to register for self-assessment the first time

The registration process is slightly different depending on whether you’re a sole trader, in a business partnership, or not self-employed but earn income from a pension or property. 

Whichever category you fall into, you’ll need to register for self-assessment with HMRC here.

Once registered, HMRC will give you a Unique Taxpayer Reference (UTR). This is a 10-digit number that stays with you for life and is required for every return you file.

Usually, you’ll receive your UTR code in the post within three weeks of registering, which you can then use to set up your Government Gateway account. You’ll need this account if you want to submit your self-assessment form online. 

HMRC will post an activation code for this account to your registered address, but it can take up to 10 working days, so don't leave this until the last week of January. It’s recommended to make sure you can log in and access your Government Gateway account ahead of the self-assessment deadline, in case you encounter any problems.

How to do a self-assessment tax return online

There are two main sections of the self-assessment tax return that you’ll need to fill in: 

1.The most important section is the SA100

This is the bulk of the form, and anyone filing a tax return will need to complete this part. It covers things like: 

• Your main income
• Pension contributions
• Charitable donations
• Taxed and untaxed income (like dividends and interest from bank accounts)
• Benefits, including State Pension and Child Benefit Allowance

2. Supplementary pages

These are extra pages that you will only need to fill out if they apply to you, such as if you have other types of income or specific circumstances. A few examples of these pages are if you’re reporting:

• SA103 — Self-employment income
• SA105 — Property income
• SA108 — Capital gains
• SA106 — Foreign income
• SA104 — Partnership income

Once you’ve got an idea of the pages you need to complete, here’s a checklist to help your filing go smoothly ahead of the 31 January deadline.

1. Gather your records

Before you log in, you need to have all your financial information to hand. Accuracy is essential, as HMRC cross-checks your return against data from banks and other third parties. 

You will need:

• Unique Taxpayer Reference 
• National Insurance number 
• Income records — This includes P60s for any employment income, plus complete records of your business sales and invoices if you are self-employed.
• Expense records — Gather receipts for allowable business costs, such as travel, office equipment, and insurance.
• Other income statements — Interest certificates from your bank, dividend vouchers, and records of any rental or foreign income.

If you’re self-employed, you must keep your business records for at least five years after the 31 January submission deadline of the relevant tax year. 

So, for the 2024/25 tax return you are filing by 31 January 2026, you should hold onto all receipts, invoices, and bank statements until at least 31 January 2031. HMRC may check these records at any time to ensure you have paid the correct amount of tax, and failing to produce them can result in penalties.

2. Log in to your Government Gateway account

Sign in to your Government Gateway account on the GOV.UK website and complete the questions. Your answers here will determine which sections of the form appear.

For example, if you select 'yes' for self-employment, the system will add the SA103 section to your return.

This means you’ll only fill in the parts applicable to your business.

3. Complete the relevant sections

Fill in your figures for income and expenses. Remember, you can save your progress and return to it later; you don't have to finish everything in one go.

If you’re a sole trader, the SA103 section is where you declare your business’s financial health. Most small businesses use the ‘Short’ (SA103S) version unless their turnover is above the VAT threshold (£90,000). In this case, they should use the ‘Full’ (SA103F) version.

In this section, you’ll report on:

• Business details — Your business description and the date your accounting year ends (usually 5 April).
• Turnover — The total amount of money your business received from sales, including cash, card, cheque, and any other types of payments.
• Allowable expenses — Costs purely for business use, such as stock, phone bills, and travel.
• Capital allowances — Tax relief for larger purchases like equipment, machinery, or business vehicles.
• Tax adjustments — Any tax already taken off your income. For hospitality or retail, this might include tax deducted from interest on a business savings account or any other income that has already had tax applied before reaching you.
• Losses — Any business losses from previous years that you want to carry forward to reduce your current bill.

4. Check your calculation

Once you’ve filled in all the sections, the system will provide a tax calculation. This shows exactly how much Income Tax and National Insurance you owe for the year.

Review this carefully to make sure the figures match your expectations.

5. Submit and save your form

In the final section, use your user ID and password to 'sign' and submit the return to HMRC.

Always save or print a copy of your submission receipt to keep for your own records. Plus, don’t forget that you must legally keep your records and receipts for at least five years after the 31 January deadline.

6. Pay your tax bill

Submitting your return is only half the task; you must also make your tax payment to HMRC by the deadline to avoid interest and penalties.

There are two main dates to keep in your diary:

• 31 January — Deadline for your ‘balancing payment’ (any tax still owed for the previous tax year). If you’re self-employed and your tax bill is more than £1,000, you’ll also need to make an advance payment towards the next year’s tax bill. This is known as payment on account, and each payment is worth 50% of your previous year’s tax bill. 
• 31 July — Deadline for the rest of your tax bill for the next year, and your second payment on account.

Example: Your first time paying self-assessment

In your first year of filing, your January payment can feel significantly higher because you are paying for the year just gone, plus the first half of the following year at the same time.

Say your first tax bill is £2,000.

By 31 January, you’ll need to pay the full £2,000 as it’s the tax you owe for the previous tax year, PLUS £1,000 as your first payment on account as an advance towards next tax year’s bill. This means your total January payment would be £3,000. You then pay the remaining £1,000 as a second payment on account by 31 July.

Example: Year two onwards

From your second year, the process evens out because you have already paid some tax in advance. However, you may still have a small ‘balancing payment’ to make if you earned more than you did the previous year.

Imagine your tax bill for 2025/26 turns out to be £2,500 (higher than the £2,000 you paid in your first year):

• Total tax owed for 2025/26: £2,500.
• Payments already made: £2,000 (£1,000 in Jan 2026 + £1,000 in July 2026).
• Due by 31 January 2027: £1,750.
• Balancing payment: £500 (The £2,500 you owe minus the £2,000 you already paid).
• First payment on account: £1,250 (50% of your new £2,500 bill for the 2026/27 tax year).
• Due by 31 July 2027: £1,250
• Second payment on account: £1,250 (The remaining 50% for the 2026/27 tax year).

As you’ll need to pay your second payment in July as an advance payment, it’s crucial to plan ahead to avoid cash flow issues in the future. Using our Sole Trader Tax Calculator tool can help you estimate your tax bill by factoring in things like your income, expenses, and tax bracket.

Frequently asked questions about self-assessment

What happens if I miss the 31 January deadline?

If you miss the 31 January deadline for filing your return, you will likely face an immediate £100 ‘failure to notify’ penalty if your return is up to three months late. After three months, additional daily penalties of up to £10 are charged, with further increases after six and twelve months. 

If you miss the deadline to pay your tax, you’ll be hit with penalties of 5% of the unpaid tax at 30 days, six months, and twelve months.  

Find out more about missed deadlines and penalties.

Can I pay my tax bill in instalments?

If you’re finding it difficult to pay your bill in one go, you may be able to set up a ‘Time to Pay’ payment plan with HMRC. This allows you to spread the cost over a series of weekly or monthly instalments, though you will typically have to pay interest on the late amount.

These payments will be used against your next tax bill, so this means you’ll have less to pay at the 31 January payment deadline.

What if I fill in the tax return wrong?

If you realise that you’ve made an error on your tax return, there is a time limit for correcting this. 

Tax returns can be amended within 12 months of the 31 January deadline. If you submitted your return online, the correction should also be made online. If you submitted your tax return on paper, this should be completed on paper. 

You can find out more about tax return corrections here.

Is the reporting threshold for trading income changing?

The government has announced plans to raise the reporting threshold for gross trading income from £1,000 to £3,000, potentially removing 300,000 people with side hustles from the self-assessment system. 

While a new simplified online service is expected for those earning in this bracket, this change hasn’t been implemented yet and isn’t in effect for the current tax year. 

For your 2024/25 return due in January 2026, the existing rules still apply: you must register and file a return if your total trading income exceeds £1,000.

Take the stress out of your small business finances

Filing your self-assessment doesn't have to be a yearly hurdle that keeps you up at night. By staying organised throughout the tax year and understanding the key deadlines, you can protect your cash flow and focus on what really matters: growing your business.

At takepayments, we believe in making business management simple. We don't just provide the tools to take payments; we provide the support to help your business thrive. 

Ready to simplify your business finances? Whether it’s phone payments, other online payment solutions, or card terminals that we can help you with, contact our team of experts today.

Jodie Wilkinson

Head of Strategic Partnerships