If you earn income from self-employment or other sources, such as investment or property, HMRC requires you to fill out a self-assessment tax return to ensure that you’re paying the correct tax.

Self-assessment is the method HMRC employs to collect tax on income from individuals employed as self-employed freelancers or who have a variety of sources. It sounds simple.

It’s not so much.These aren’t the only reasons you might have to file an income tax return. The UK tax system is complex. Finding out when, if, and how to complete the self-assessment can be confusing, especially if you’ve yet to finish it before or are dealing with complicated requirements.

 

What is Self Assessment?

When you start a business for yourself or earn earnings from different sources not taxed at the date of tax payment, self-assessment is the method HMRC employs to pay income tax. Self-assessment tax returns must be due each year on or before January 1 when you file online.

 

Do I have to fill out a self-assessment tax return?

Although most people in the UK are not required to file tax returns since their income is taxed at source via PAYE, there are certain circumstances in which you’ll require completing your tax return.

In this article, we’ll go over 3 of the frequent reasons for you to make a Self Assessment application with HM Revenue & Customs:

  • You do not have tax-free income.
  • You believe that you are entitled to a tax refund or relief from tax
  • HMRC is sending you a notification to complete a tax return
  1. Self-assessment tax returns to claim non-taxed income

Untaxed income is the amount you earn that is taxed once you get it. The amount of taxable earnings is above the threshold for Personal Allowance – the minimum amount you can make tax-free. You must inform HMRC about the income on which you still need to pay tax.

Common areas in which income is tax-free in the first place:

  • Earnings from self-employment as a sole trader
  • Dividend income
  • Rent money earned from renting the property of an owner
  • Investments and savings income
  • Foreign profits you earn while in the UK
  • The payment you deserve from the UK while you are living in another country
  • If your earnings were more outstanding than £100,000
  • Anything you make on top of your salary which PAYE doesn’t tax
  • Capital profits arising from the sale of property shares or other assets which you are subject to Capital Gains Tax.
  1. Refunds or tax relief via Self Assessment

HMRC is distributing money. Is it even feasible? This only happens sometimes; however, if you’ve paid too much tax, you might have a right to tax refunds!

Although HMRC might occasionally inform you of the possibility of a tax refund (for instance, when you’ve surpassed your tax liability via PAYE), it is more likely that you’ll have to file a claim by hand through Self Assessment to receive a tax rebate or relief from tax.

The reasons you could overpay your tax bill:

  • The tax code you were expecting was provided to your employer. This could be a typical problem when the tax codes are issued in an emergency.  
  • Inactive allowances and reliefs like “Marriage Allowance.”
  • If there isn’t an application for a tax refund for specific items or expenses for work.
  • You are not claiming all tax reliefs when you’re self-employed.
  • If an individual has several sources of income, these are taxed at birth (e.g., pensions)
  • If it is part of the Construction Industry Scheme, a contractor can deduct more than is necessary.
  • Payroll error miscalculations
  • No P45 was supplied to describe prior employment in the event of an employment change.
  1. Notification to complete Self Assessment Self Assessment

HMRC could contact you regarding filing a Self Assessment – if you receive a notice that you must submit your tax return, you must complete the tax return by the due date.

If you believe you’ve been issued a notice by mistake, you can call HMRC or have your accountant do this on your behalf and ask them to remove the information and make a Self Assessment; however, you’ll likely have to file the tax return.

Work with your accountant to complete taxes on your Self-assessment tax return.

Tax season can be stressful, and mistakes are bound to happen when you’re in a hurry to complete your tax return. Sadly, with Self Assessments, mistakes can cost you!

If you need help with what to do and are unsure about handling your tax return, or you’re concerned that you’re not equipped to file on time, hiring an accountant is usually the best option because it can reduce cash and time.

The information we’ll need to prepare for you to complete your Self Assessment tax return:

  • Ten-digit Unique Taxpayer Reference (UTR) If you submit your first time filing an income tax return. This will be issued when you’ve signed up as a Self Assessor with HMRC.
  • You must provide your P60/P45 for any earnings from employment, your P11D for any tax-deductible benefits (Benefits In Kind), and your final pay slip for the tax year you claim.
  • Information about any other income that is earned for the tax year in question, including;
    • Data on the amount of income and expenditure from rental properties
    • Trust income
    • Documentation of the income and expenditure from partnerships or self-employment (including all CIS deductions, if applicable)
    • Other interest from banks or other sources
    • Dividends earned on shareholdings, as well as any other earnings derived from investments
    • Any pension income (including the state pension, in the event of state pension)
  • Contributions to personal pension plans
  • The details of your charitable donation on which you could receive tax-free relief
  • Documentation of any SEIS/EIS/VCT investments that were made during the time
  • Information on Child Benefits received
  • Information on any capital sale (shares or property, etc.)
  • If applicable, details about any outstanding student loans

Important note:

The first phase of Making Tax Digital for Income Tax Self Assessment Tax Returns (MTD for ITSA) will be practical from April 20, 2026, for self-employed persons and landlords earning greater than £50,000.

Paying your taxes promptly is vitally important. If you fail to meet the deadline, you’ll be assessed penalties. The amount you are liable for is contingent upon how late the return was filed, and if you have paid tax bills late, delinquent tax payments are also subject to interest fees.

How can Account Ease aid you?

Our tax assistance services are designed to assist you to organise your finances and tax issues efficiently. Contact us directly with tax experts who can provide personalised advice specific to your tax requirements, focusing on improving your personal wealth while reducing tax liabilities.