Self Assessment is the system HMRC uses to collect income tax that is not deducted at source. If you are employed and paid through PAYE with no other income, you will probably never see it. If you have started a business, taken on a rental property, begun receiving dividends from your own company, or crossed one of a handful of income thresholds, you are now inside it, and the first year is the one where most of the avoidable mistakes happen. This guide walks through the whole first cycle, from working out whether you need to file to paying what is due, using the rules and figures for the 2026/27 tax year.
Do you need to file?
You must file a Self Assessment return if, in the tax year, you were self-employed with gross income over £1,000; you were a partner in a partnership; you received rental income with profit over £2,500 or gross rent over £10,000; your total income was over £150,000; you or your partner received Child Benefit and one of you had adjusted income over £60,000; you had untaxed income such as dividends above the £500 allowance, savings interest above your personal savings allowance, foreign income, or tips and commission; you made capital gains above the £3,000 annual exempt amount or disposals over £50,000; or HMRC has sent you a notice to file. Company directors are not automatically required to file, contrary to what many websites still say, but almost every director who takes dividends above the allowance meets the untaxed-income test.
If none of these apply, you do not need a return, and you should not register, because once registered HMRC expects a return every year until you tell it otherwise.
The calendar
The tax year runs from 6 April to 5 April. If your untaxed income began during the 2026/27 tax year, the dates that matter are:
- 5 October 2027: deadline to register for Self Assessment and obtain your Unique Taxpayer Reference.
- 31 October 2027: deadline for a paper return, which almost nobody should use.
- 31 January 2028: deadline for the online return and for paying the tax due, plus the first payment on account for 2027/28 if it applies.
- 31 July 2028: second payment on account.
The penalties for a late return are automatic: £100 the day after 31 January, £10 a day from three months late up to £900, and the greater of £300 or 5% of the tax at six and twelve months. Interest and separate late-payment penalties apply to the tax itself. Registering late can also attract a failure-to-notify penalty if tax turns out to be due.
Registering
Registration is online through GOV.UK and the route depends on why you are filing: self-employment, partnership, or other untaxed income. The self-employment route also registers you for Class 2 National Insurance credits, which protect your State Pension record. HMRC posts your ten-digit Unique Taxpayer Reference within about ten working days and separately sends an activation code for your online account. You cannot file without the UTR, so register well before any deadline. If you have filed in the past and lost your UTR, recover it rather than registering again; a second reference creates years of confusion.
What records you need
For self-employment: a record of every sale or payment received, every business expense with receipts, business bank statements, mileage logs if you use a vehicle, and details of any equipment bought. For rental income: rent received, agent statements, mortgage interest certificates, repair and insurance invoices. For employment alongside: your P60, and any P45 and P11D. For dividends: the dividend vouchers from your company or your broker's consolidated tax certificate. For savings: interest statements. For gains: purchase and sale contracts and costs. Keep everything for at least five years after the 31 January deadline. Photos and PDFs are fine; HMRC does not require paper.
How the return is built
The main return is the SA100. It collects your personal details, your employment and pension income, savings and dividend income, and the reliefs you are claiming. Supplementary pages are added for each kind of other income: SA103 for self-employment, SA104 for partnership, SA105 for UK property, SA106 for foreign income, SA108 for capital gains. The software, HMRC's own or commercial, adds the pages as you answer questions.
For the self-employed, the heart of the return is the profit figure on the SA103: turnover less allowable expenses. Since April 2024 the cash basis is the default, recording income when received and expenses when paid, with no turnover limit. Allowable expenses are those incurred wholly and exclusively for the business: materials, business travel other than ordinary commuting, a proportion of home costs, software, insurance, professional fees, bank charges and protective clothing. If your expenses are under £1,000 the trading allowance may be better than claiming them. Equipment is deducted when paid under the cash basis.
What you will pay
Income tax is charged on your total income after the £12,570 personal allowance, at 20% up to £50,270, 40% up to £125,140 and 45% above, with Scottish rates applying to Scottish residents and the personal allowance tapered away above £100,000. On self-employed profit you also pay Class 4 National Insurance at 6% between £12,570 and £50,270 and 2% above. Dividends are taxed at 10.75%, 35.75% and 39.35% above the £500 allowance. Savings interest has its own allowance of £1,000 for basic rate taxpayers and £500 for higher rate.
Payments on account
The first-year surprise. If your bill is more than £1,000 and less than 80% of your tax was collected at source, HMRC asks for two advance payments towards next year, each half of this year's bill, due 31 January and 31 July. So on 31 January 2028 you pay the 2026/27 bill plus half of it again as the first payment on account for 2027/28. If you expect next year's income to be lower you can apply to reduce the payments, but reducing them below what turns out to be due attracts interest. Budget for one and a half times the first year's tax.
Common first-year mistakes
Registering late or not at all. Forgetting that the side business counts even though the day job is taxed through PAYE. Claiming commuting, lunches or ordinary clothes. Not claiming home working costs or the business share of the phone. Leaving the P60 figures off, so HMRC's records and the return disagree. Using the wrong tax year's figures. Not budgeting for payments on account. Filing on 30 January without the records to hand. Each is avoidable with a calendar and a folder.
Getting it done
Our Self Assessment service prepares and files the return for a fixed £129 for one income source, including the reconciliation against HMRC's records, the expense review and the payment schedule. If you have not yet registered, UTR registration is £29. The take-home pay calculator gives a first estimate of the tax, and the deadline finder lists your dates.
If you are also employed
Many first returns are for people with a job and something on the side. Your employment income and the tax already deducted go on the employment pages from your P60, and the side income goes on its own pages. The return then calculates tax on the combined total, so a side business of £8,000 on top of a £40,000 salary is taxed at 20% on the first £2,270 and 40% on the rest, not at 20% throughout. Your tax code may also change for the following year if HMRC decides to collect the extra through PAYE, which you can ask it not to do.
Paying
HMRC accepts bank transfer, debit card, direct debit and, for amounts under £3,000 where the return is filed by 30 December, collection through your tax code over the following year. Use the eleven-character payment reference, your UTR followed by K, or the money will sit unallocated. If you cannot pay in full, apply for a Time to Pay arrangement online before 31 January; it spreads the bill over up to twelve months and stops the late-payment penalties, though interest runs.
After filing
Keep the submission receipt, the calculation and a copy of the return. HMRC has twelve months from filing to open an enquiry into a return filed on time, and longer where something was left out. Next year's dates are the same, and the return will be easier because the registration is done, the records system exists and the payments on account have been budgeted.
If you are also employed
Many first returns are for people with a job and something on the side. Your employment income and the tax already deducted go on the employment pages from your P60, and the side income goes on its own pages. The return then calculates tax on the combined total, so a side business of £8,000 on top of a £40,000 salary is taxed at 20% on the first £2,270 and 40% on the rest, not at 20% throughout. Your tax code may also change for the following year if HMRC decides to collect the extra through PAYE, which you can ask it not to do.
Paying
HMRC accepts bank transfer, debit card, direct debit and, for amounts under £3,000 where the return is filed by 30 December, collection through your tax code over the following year. Use the eleven-character payment reference, your UTR followed by K, or the money will sit unallocated. If you cannot pay in full, apply for a Time to Pay arrangement online before 31 January; it spreads the bill over up to twelve months and stops the late-payment penalties, though interest runs.
After filing
Keep the submission receipt, the calculation and a copy of the return. HMRC has twelve months from filing to open an enquiry into a return filed on time, and longer where something was left out. Next year's dates are the same, and the return will be easier because the registration is done, the records system exists and the payments on account have been budgeted.
If you are also employed
Many first returns are for people with a job and something on the side. Your employment income and the tax already deducted go on the employment pages from your P60, and the side income goes on its own pages. The return then calculates tax on the combined total, so a side business of £8,000 on top of a £40,000 salary is taxed at 20% on the first £2,270 and 40% on the rest, not at 20% throughout. Your tax code may also change for the following year if HMRC decides to collect the extra through PAYE, which you can ask it not to do.
Paying
HMRC accepts bank transfer, debit card, direct debit and, for amounts under £3,000 where the return is filed by 30 December, collection through your tax code over the following year. Use the eleven-character payment reference, your UTR followed by K, or the money will sit unallocated. If you cannot pay in full, apply for a Time to Pay arrangement online before 31 January; it spreads the bill over up to twelve months and stops the late-payment penalties, though interest runs.
After filing
Keep the submission receipt, the calculation and a copy of the return. HMRC has twelve months from filing to open an enquiry into a return filed on time, and longer where something was left out. Next year's dates are the same, and the return will be easier because the registration is done, the records system exists and the payments on account have been budgeted.