Most people in the UK pay income tax through PAYE. Their employer deducts it before they are paid. But if you have income that is not taxed at source, HMRC expects you to report it through a Self Assessment tax return. HMRC's guidance sets out exactly who must send a tax return.
There is more to the rules than many people expect. If you miss a registration requirement, HMRC can charge penalties.
Disclaimer: This article gives general information only. Your tax obligations depend on your own circumstances. If you are not sure whether you need to file, speak to a qualified accountant.
Do all self-employed people need to do Self Assessment?
Yes. If you are 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. That applies even if you have not made a profit yet. The £1,000 threshold is turnover, not profit.
The £1,000 limit is the trading income allowance. If your income stays below it, you do not need to report self-employment income to HMRC. If it goes above it, you must register by 5 October after the tax year in which you started trading.
So if you started self-employment in the 2025/26 tax year, which ended on 5 April 2026, your registration deadline was 5 October 2026.
If you do not tell HMRC, you can be charged a penalty. HMRC can issue a “failure to notify” penalty based on the tax you owe.
Do company directors need to file Self Assessment?
Yes, in most cases. HMRC usually asks company directors to file a Self Assessment return even if all their income is taxed through PAYE. Directors often receive dividends, claim company expenses, or have other tax matters that PAYE cannot deal with on its own.
If you are a director and HMRC has sent you a Notice to File, you must submit a return.
If you have not received a notice, you should still register if you receive income that is not 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 types of income outside 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 starts to reduce.
Specific triggers include:
Rental income. If you receive rent from a property and that income is not fully covered by your allowances, you must declare it. Even if you make a loss, declaring it can help you 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 on gov.uk, because they have changed in recent years.
Foreign income. Any income earned abroad that is taxable in the UK must be declared. Even if you paid tax in the country where it came from, the UK may still require a return because the rules are different.
Income over £100,000. If your adjusted net income is above £100,000, your personal allowance drops by £1 for every £2 above that threshold. PAYE cannot handle this on its own, so you need 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 the current figures on gov.uk. If the charge applies, you need a Self Assessment return to pay it.
Partners in a business partnership. Each partner must file separately and report their share of the partnership income.
What if you are employed but have other income?
Your employer handles tax on your salary. But any other taxable income, such as freelance work, rental income, or dividends, sits outside PAYE. HMRC will not know about it unless you report it.
If the extra income is small, such as a few hundred pounds in bank interest, your tax code may handle it. But anything significant, or anything HMRC has not already included in your tax code, should be declared.
When in doubt, register. It is far better to file a return you did not need than to miss one you did. 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 sends a Notice to File, you must submit a return for that year, even if you have no tax to pay. If you ignore it, automatic late filing penalties start with a £100 fixed charge.
You can ask HMRC to withdraw a Notice to File if you think you do not need to file. But you must do that before the deadline.
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 people with other income register separately. If you are new to Self Assessment, HMRC posts your Unique Taxpayer Reference (UTR) number, which usually takes around 10 working days.
You need your UTR to submit a return, so register early and do not wait until January. Once you are registered, see 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 have recently become self-employed, started receiving new income, or are still unsure whether you need to file, we can review your situation and handle the return.
Get a quote and we will send you our current pricing: DASA's self assessment tax return service.
Author: Raqeeb Marzook ACCA, Manager at DASA Accountancy. For corrections or updates to this article, contact: raqeeb@dasaaccountancy.co.uk