Self Assessment for the Self-Employed: A 2026 UK Guide

Short answer: Self Assessment for the self-employed is how HMRC collects Income Tax and National Insurance from sole traders. If you earned more than £1,000 from your trade in a tax year, register by 5 October after that year ends, file online and pay by 31 January, or file on paper by 31 October. If your last bill was £1,000 or more and most of your tax was not taken at source, you also make payments on account on 31 January and 31 July, each usually half of last year’s tax.

Nobody files on your behalf the way an employer does under PAYE, so HMRC knows nothing about your profit until you declare it. For a sole trader or freelancer, that declaration is the main once-a-year tax job, and good records make it far less stressful.

Who has to register for Self Assessment?

You must register for Self Assessment as a sole trader if your gross trading income in a tax year (6 April to 5 April) was more than £1,000. The £1,000 figure is the trading allowance: if you earned that or less, you usually do not need to report it.

According to GOV.UK, you must still register even under £1,000 in certain cases, for example if you want to:

• Claim relief for a loss on your return
• Pay voluntary Class 2 National Insurance to protect benefit entitlements
• Claim Tax-Free Childcare or Maternity Allowance based on self-employment

You may also need Self Assessment for other reasons (rental income, high income, dividends), but this guide focuses on self-employment.

What are the Self Assessment deadlines for 2026?

Miss a deadline and HMRC charges an automatic penalty, so put these dates in your calendar. The table uses the 2025/26 tax year (6 April 2025 to 5 April 2026) as the worked example.

Task	Deadline	2025/26 tax year date
Register for Self Assessment (new sole traders)	5 October after the tax year ends	5 October 2026
Submit a paper tax return	31 October	31 October 2026
Submit an online tax return	31 January	31 January 2027
Pay the tax you owe (balancing payment)	31 January	31 January 2027
First payment on account	31 January	31 January 2027
Second payment on account	31 July	31 July 2027

Source: GOV.UK, “Self Assessment tax returns: Deadlines” and “Understand your Self Assessment tax bill: Payments on account”.

What happens if I file or pay late?

The first late filing penalty lands the day after the deadline, whatever your bill turns out to be.

• 1 day late: a fixed £100 penalty, even if your bill is zero or you have already paid it.
• 3 months late: £10 for each further day, capped at 90 days (a maximum of £900), on top of the £100.
• 6 and 12 months late: a further 5% of the tax due or £300, whichever is greater, at each of those points.

Paying late is charged separately from filing late: 5% of the tax still unpaid 30 days after the due date, again at 6 months and again at 12 months, plus interest running from the day after payment was due. HMRC will cancel a late filing penalty if you have a reasonable excuse, but you have to appeal and explain it rather than wait for HMRC to notice. Check the current amounts and the appeal route in the GOV.UK guidance on Self Assessment penalties. A different, points-based late submission regime applies to people inside Making Tax Digital for Income Tax, so check which set of rules covers you rather than assuming the £100 applies.

What are payments on account?

Payments on account are advance payments towards your next tax bill. HMRC asks for them if your Self Assessment bill is £1,000 or more and less than 80% of your tax was collected at source.

• Each payment on account is usually half of your previous year’s tax bill.
• The first is due 31 January (alongside your balancing payment for the prior year).
• The second is due 31 July.
• Class 4 National Insurance is included; Class 2 is not part of payments on account.

For your first year of trading, this can be a shock: you may pay the tax for the year just gone plus the first payment on account for the next year on the same 31 January date. Set money aside early.

How much tax and National Insurance will I pay?

Through Self Assessment, a self-employed person typically pays Income Tax on their profits plus National Insurance.

Charge	2025/26 position	Notes
Income Tax	Standard rates and bands on taxable profit	Personal Allowance applies before tax is due
Class 4 National Insurance	Main rate of 6% on profits between the lower and upper profit limits	An additional 2% applies to profits above the upper limit
Class 2 National Insurance	£3.50 per week for 2025/26	Now generally treated differently since April 2024; see GOV.UK. Voluntary Class 2 can protect benefits if profits are low

Figures such as bands, allowances and thresholds change each year. Verify the current rates on GOV.UK, or use HMRC’s “Estimate your Self Assessment tax bill” tool. This article does not quote every band because they are updated annually.

What records do I need to complete a return?

You cannot fill in an accurate return without your numbers. Keep the following throughout the year:

• Sales and income records — every invoice you issued and what was actually paid; invoicing as a sole trader covers what each one has to show
• Business expenses with receipts
• Bank statements for business transactions
• Mileage logs if you claim vehicle costs; the UK self-employed mileage allowance guide sets out the rates and what a trip record needs to contain
• Records of any other taxable income

HMRC requires self-employed people to keep records for at least 5 years after the 31 January submission deadline of the relevant tax year. If HMRC opens a check, these records are your evidence. Keeping them current beats reconstructing them in January, and sole trader bookkeeping sets out the monthly routine that makes that possible.

How can an app make Self Assessment easier?

The hardest part of Self Assessment is usually not the form; it is having a clean, complete record of your income and expenses ready in January. Capturing everything as it happens removes the year-end panic.

Keel: Invoice Maker & Receipts by Ilura Technology is a private, on-device app for the self-employed. You can create invoices, capture receipts and log business trips, all stored encrypted on your iPhone with no bank connection, no cloud and no account (the App Store lists its data practices as “Data Not Collected”). Receipts are read on device by Apple Intelligence, so the photograph of a fuel receipt never leaves your phone to be processed somewhere else.

An honest note: Keel is a record-keeper, not a filing service. It does not send anything to HMRC on your behalf, and because there is no bank feed, entries are typed or photographed rather than imported. What it gives you in January is the part most people are missing — a complete, dated set of invoices, receipts and trips, exportable as a single file for the year, with an Accountant Pack that adds a CSV plus a one-page summary PDF. Hand that over, or work from it while you fill in the return yourself.

A simple Self Assessment checklist

• Confirm you need to file (trade income over £1,000, or another reason)
• Register with HMRC by 5 October after the tax year
• Get your Unique Taxpayer Reference (UTR) and Government Gateway login
• Total your income and allowable expenses
• Note whether payments on account apply to you
• File online by 31 January (or paper by 31 October)
• Pay by 31 January (and 31 July if you have a second payment on account)
• Keep all records for at least 5 years

Frequently asked questions

Do I have to register for Self Assessment if I earn under £1,000? Usually no, thanks to the £1,000 trading allowance — but note that it is measured against gross income, not profit, so £1,200 of sales with £400 of costs still crosses the line. You must also register if you want to claim a loss, pay voluntary Class 2 NIC to protect your State Pension record, or claim Tax-Free Childcare or Maternity Allowance based on self-employment.

When is the Self Assessment deadline? Online returns and payment are both due by 31 January after the tax year ends; paper returns are due earlier, by 31 October. New sole traders must register by 5 October after the tax year in which they started trading. A second payment on account, if you have one, falls due on 31 July. Filing even a day late triggers the automatic £100 penalty, so leave room if January is a busy month.

What are payments on account? Advance instalments towards next year’s tax, each usually half of your previous bill, due 31 January and 31 July. They apply if your last bill was £1,000 or more and less than 80% of your tax was collected at source. If you know your profits have dropped, you can ask HMRC to reduce the instalments — but cut them too far and HMRC charges interest on the shortfall.

What is Making Tax Digital for Income Tax? From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must keep digital records and send quarterly updates using compatible software. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Check “Making Tax Digital for Income Tax” on GOV.UK to see if it affects you.

Can I file Self Assessment myself? Yes, many sole traders file their own return through GOV.UK. You need a Unique Taxpayer Reference and a Government Gateway account, and HMRC’s online service works out the tax once your figures are in. Register early in your first year: the UTR comes by post, usually within about 10 working days. For anything complex — property, foreign income, a first year with losses — an accountant is worth the fee.

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The bottom line

Self Assessment is manageable if you register on time, know your deadlines (31 October paper, 31 January online and payment, plus 31 July for a second payment on account) and keep clean records all year. Keeping invoices and receipts current, for example in a private app like Keel, turns a January scramble into a quick review. Confirm current rates and thresholds on GOV.UK.

Try Keel on the App Store: https://apps.apple.com/us/app/keel-invoice-maker-receipts/id6786659713 (Free with unlimited invoices, receipts and mileage; Keel Pro is a one-time $249.99 Lifetime purchase, not a subscription — see the App Store for local pricing).

This article is general information, not tax advice. Consult a qualified accountant or tax adviser.