Most people in the UK pay their income tax automatically through PAYE. Their employer deducts it before they receive their pay. But if you have income that isn’t taxed at source, HMRC requires you to report it yourself through a Self Assessment tax return. HMRC’s guidance sets out exactly who must send a tax return.
More people need to file than they expect. Missing the registration deadline can lead to penalties.
Disclaimer: This article is for general information only. Tax obligations depend on your specific circumstances. Speak to a qualified accountant if you’re unsure whether you need to file.
Do all self-employed people need to do Self Assessment?
Yes, if you’re a sole trader and your gross income from self-employment is more than £1,000 in a tax year, you must register for Self Assessment and file a return. This applies even if you haven’t yet made a profit. The £1,000 threshold is turnover, not profit.
The £1,000 limit is the trading income allowance. Below it, you don’t need to report self-employment income to HMRC. Above it, you must register by 5 October following the end of the tax year in which you started trading.
So if you started self-employment in the 2025/26 tax year (which ended 5 April 2026), your registration deadline was 5 October 2026.
Failing to notify HMRC is itself a penalty offence. HMRC can charge a “failure to notify” penalty based on the tax you owe.
Do company directors need to file Self Assessment?
Yes, in most cases. HMRC typically requires company directors to file a Self Assessment return even if all their income is taxed at source through PAYE. This is because directors often receive dividends, have access to company expenses, or have other tax considerations that can’t be handled through PAYE alone.
If you’re a director and have received a Notice to File from HMRC, you must submit a return.
If you haven’t received a notice, you should still register if you receive income that isn’t fully taxed through PAYE, such as dividends from your own company.
What income triggers a Self Assessment requirement?
HMRC requires a Self Assessment return for several categories of income beyond self-employment. These include rental income from property, investment income and dividends above a certain threshold, foreign income, capital gains, and income above £100,000 (where the personal allowance begins to reduce).
Common triggers include:
Rental income. If you receive rent from a property and that income isn’t fully covered by your allowances, you must declare it. Even if you make a loss, declaring it allows you to carry the loss forward.
Dividends and savings. If you receive dividends above the annual dividend allowance, or savings interest above the Personal Savings Allowance, you may need to file. Check the current thresholds at gov.uk, they’ve changed in recent years.
Foreign income. Any income earned abroad that’s taxable in the UK must be declared. Even if you paid tax in the country of origin, the UK has different rules and may require a return.
Income over £100,000. If your adjusted net income exceeds £100,000, your personal allowance reduces by £1 for every £2 of income over that threshold. This cannot be handled through PAYE and requires a Self Assessment return.
High Income Child Benefit Charge. If you or your partner receive Child Benefit and either of you earns above the threshold (check current figures at gov.uk, this changed in April 2024), a Self Assessment return is required to pay the High Income Child Benefit Charge.
Partners in a business partnership. Every partner must file individually and report their share of the partnership income.
What if you’re employed but have other income?
Your employer handles income tax on your salary. But any other taxable income, freelance work, rental income, dividends, sits outside PAYE. HMRC won’t know about it unless you tell them.
If the additional income is small (say, a few hundred pounds in bank interest), your tax code may handle it. But anything significant, or anything HMRC hasn’t explicitly picked up in your tax code, needs to be declared.
When in doubt, register. It’s far better to file an unnecessary return than to miss a required one. You can also check if you need to send a Self Assessment tax return using HMRC’s online tool.
What if HMRC sends you a Notice to File?
If HMRC issues a Notice to File, you must submit a return for that year, even if you have no tax to pay. Ignoring the notice leads to automatic late filing penalties, starting with a £100 fixed charge.
You can ask HMRC to withdraw a Notice to File if you believe you don’t need to file. But you must do this before the deadline, not after.
How do you register for Self Assessment?
Register for Self Assessment online through your HMRC account. Self-employed people register as sole traders. Directors and those with other income register separately. If you’re new to Self Assessment, HMRC sends your Unique Taxpayer Reference (UTR) number by post, which takes around 10 working days.
You need your UTR to submit a return, so register early, don’t wait until January. Once registered, check our guides on self assessment deadlines and what you can claim through self assessment.
Working with an accountant for self assessment means the registration, filing, and payment calculations are handled correctly from the start.
DASA can file your return for you
If you’ve recently become self-employed, received new income sources, or are simply unsure whether you need to file, we can review your situation and handle the return.
Get a quote and we’ll send you our current pricing, DASA’s self assessment service.