HMRC self assessment sole trader filing is a legal requirement for individuals who earn above the tax-free personal allowance or have untaxed income from self-employment, rental properties, investments, or other sources.. It allows HMRC to calculate how much income tax and National Insurance you owe based on your declared earnings and allowable expenses. While the process may seem daunting at first, understanding how to do self assessment can simplify compliance and help you avoid issues down the line.
For sole traders, the self-assessment system is not just about meeting obligations—it’s also a valuable opportunity to optimise your tax position using legitimate deductions and reliefs. Whether you’re using a tax return checklist, relying on tax return software, or consulting a self assessment accountant UK, getting it right matters. Filing early allows time to estimate self assessment tax liabilities and spread out payments. This is particularly helpful for those juggling multiple roles—such as tax return for freelancers, landlords, students, pensioners, or even company directors.
Accuracy and timeliness are critical. Missing the self assessment deadline or filing inaccurate information can lead to significant self assessment penalties and a late tax return fine. That’s why many turn to self assessment support services or seek tax return help UK to avoid common errors. Ensuring you submit tax return to HMRC before the tax return due date can protect you from unexpected fines and stress.
Thanks to the expansion of digital tools, it’s now easier than ever to file tax return online using trusted platforms or the best self assessment app. HMRC also provides tools like the hmrc tax calculator and online tax filing systems to guide you through the process. You can always contact the self assessment helpline or use the self assessment phone number if you need assistance. If it’s your first time, don’t forget to complete your self assessment registration early, and if needed, you can amend tax return UK submissions later.
Ultimately, accurate and timely filing gives you peace of mind, ensures compliance, and positions you to claim tax refund self assessment benefits where applicable. Whether you’re looking to pay self assessment bill early, learn how to register for self assessment, or simply access free self assessment advice, staying ahead of the deadline makes all the difference.
Who Needs to File a HMRC Self-Assessment Tax Return?
Criteria for UK Sole Traders
If you’re a sole trader in the UK and your total income from self-employment exceeds £1,000 in a tax year, you are legally required to file a self-assessment tax return. This applies regardless of whether it’s a full-time business or a side hustle. Submitting your income tax return UK ensures you pay the right amount of tax and National Insurance based on your business profits. To begin, you must complete the self assessment registration process with HMRC and obtain a Unique Taxpayer Reference (UTR).
Once registered, you can file tax return online through the HMRC portal using your hmrc self assessment login. The system allows you to report your income, claim allowable expenses, and calculate your tax due using tools such as the hmrc tax calculator. Filing your return accurately and before the tax return due date is essential to avoid self assessment penalties and a potential late tax return fine.
Other Cases Where Self-Assessment Is Required
While sole traders are among the most common filers, there are several other situations where individuals must submit a self-assessment tax return. These include:
- Earning untaxed income from property (e.g., tax return for landlords)
- Earning more than £100,000 in a tax year
- Receiving foreign income
- Claiming certain tax reliefs or expenses
- Receiving dividends or savings income above thresholds
- Needing to claim tax refund self assessment
- Directors or high-income employees with complex tax affairs (e.g., self assessment for company directors)
- Students or pensioners with side income (self assessment for students, self assessment for pensioners)
People in these groups often benefit from using tax agent for self assessment services, the best self assessment app, or tax return software to ensure their obligations are met correctly.
Common Misconceptions
A common myth is that you don’t need to file if your earnings are below the personal allowance. While this is true in most cases, if you’re self-employed and made over £1,000, even if it’s a side gig, you must still submit your return. Others wrongly assume that HMRC will inform them if they need to register—when in fact, the responsibility lies entirely with the individual.
Another misconception is that only full-time businesses need to file. In reality, tax return for freelancers or part-time sole traders is still mandatory if the income threshold is crossed. Some believe online tax filing is optional, but paper submissions (self assessment paper form) must be received by 31 October, while digital submissions must meet the 31 January deadline.
Failure to understand these obligations can result in missed opportunities to claim reliefs, misreported income, and penalties. It’s always wise to seek self assessment tax tips, explore how to avoid tax return penalties, or contact the self assessment helpline for clarity on your situation.
Key Deadlines for the HMRC self assessment sole trader 2024–2025 Tax Year
Understanding and meeting the self-assessment deadlines is crucial for avoiding fines and interest charges. Whether you file tax return online or submit a paper version, HMRC sets firm dates each year that apply to all self-employed individuals and others required to complete a tax return.
End of the Tax Year – 5 April 2025
The UK tax year runs from 6 April 2024 to 5 April 2025. This period is what your 2024–2025 self-assessment tax return will cover. Any income earned, business expenses claimed, and tax-deductible allowances used during this timeframe must be accurately reported.
Paper Return Deadline – 31 October 2025
If you choose to submit a self assessment paper form, it must reach HMRC by midnight on 31 October 2025. This applies to individuals not using online tax filing systems. Paper filers should ensure accurate and complete information is submitted well before the cut-off to avoid delays or the need for self assessment error correction.
Online Return Deadline – 31 January 2026
The most common and convenient method is to file tax return online, which gives you until midnight on 31 January 2026to submit your self-assessment. This also includes any final changes, such as amending income details or applying for allowances. If you haven’t done so already, ensure your self assessment registration is completed early to get your UTR and access credentials.
Tax Payment Deadlines
- 31 January 2026: Final payment for your 2024–2025 tax bill is due, including the first payment on account for the 2025–2026 tax year (if applicable).
- 31 July 2026: Second payment on account deadline for 2025–2026.
Payments can be made using your online HMRC account or through recognised methods, including bank transfer or direct debit. It’s essential to pay self assessment bill on time to avoid accruing interest.
Late Filing Penalties
Missing the self assessment deadline—even by one day—will result in automatic penalties:
- £100 fine for filing up to 3 months late
- Daily penalties of £10 per day (up to 90 days) if still not submitted
- Additional penalties of £300 or 5% of tax due if over 6 or 12 months late
- Interest is also charged on late payments
Using tools such as a self assessment tax checklist or tax return software, and setting reminders to file tax return before deadline, can help you stay compliant. If you’re unsure or overwhelmed, contact the self assessment helpline or seek free self assessment advice to avoid unnecessary penalties.
Documents and Information You’ll Need for HMRC self assessment sole trader
Before you begin your self-assessment tax return, it’s essential to gather all the necessary documents and financial records. Having everything ready in advance helps ensure accuracy, avoids delays, and reduces the risk of self assessment penalties due to incomplete or incorrect submissions. Here’s what you’ll need:
1. Unique Taxpayer Reference (UTR) Number
Your UTR is a 10-digit code issued by HMRC when you register for self-assessment. It’s used to identify your tax records and must be included on your return. If you’ve lost it, you can retrieve it through your HMRC self assessment login or by calling the self assessment phone number. You’ll need this number whether you’re submitting a self assessment paper form or using online tax filing.
2. National Insurance Number
This number links your tax return to your National Insurance contributions. It’s also used to calculate Class 2 and Class 4 NICs for sole traders. Ensure it’s correctly entered on your return to avoid delays in processing or benefit entitlement issues.
3. Business Income Records
You must declare all business income earned between 6 April 2024 and 5 April 2025. This includes income from:
- Sole trading or freelancing
- Contracting work
- Part-time side businesses
- Invoiced payments received within the tax year
Whether you’re a freelancer, landlord, or company director, keeping detailed records ensures you can calculate self assessment payment accurately and avoid underreporting.
4. Expense Receipts
Claiming allowable expenses reduces your taxable profit. Collect and organise receipts for costs like:
- Office supplies and equipment
- Internet and phone use
- Travel and mileage
- Software subscriptions
- Professional services (e.g. tax agent for self assessment)
Be prepared to show these if HMRC requests them as part of a compliance check or investigation. Using a self employed tax guide or self assessment tax tips can help you identify what’s claimable.
5. Bank Statements
Bank statements provide a clear overview of your income and expenditure. They help reconcile transactions and support your declared figures, particularly for sole traders without accounting software. They’re also useful for identifying missed income entries or duplicated expenses.
6. Other Income (e.g. Savings Interest, Dividends)
You must also report any non-business income, including:
- Interest from savings accounts
- Dividends from shares
- Rental income (tax return for landlords)
- Foreign income
- Pension income or student grants (self assessment for students or pensioners)
Failing to report additional income could lead to underpayment and trigger penalties or an HMRC investigation. It’s wise to amend tax return UK submissions promptly if anything is missed.
Having all of the above ready allows you to submit tax return to HMRC confidently, use the HMRC tax calculator if needed, and meet your tax return due date. Many sole traders use tax return software or the best self assessment app to streamline this process and reduce the risk of error.
Step-by-Step Filing HMRC self assessment sole trader Process (Online)
1. Registering for Self-Assessment (if you’re new)
If you’ve never submitted a Self-Assessment tax return before, you must register with HMRC:
- Deadline: Register by 5 October 2025 following the end of the tax year (5 April 2025).
- How to register:
- Go to the HMRC Self-Assessment registration page.
- Choose “Register if you’re self-employed” or the relevant option.
- Provide your full name, address, National Insurance number, and business details.
- Once registered, HMRC will send you a Unique Taxpayer Reference (UTR) by post within 10 days, along with instructions to set up your online account.
2. Logging into Your HMRC Online Account
Once you have your UTR:
- Visit: www.gov.uk/log-in-register-hmrc-online-services
- Log in using your Government Gateway ID and password.
- If you don’t have one, create a new Government Gateway account using your UTR and personal information.
- You may need to verify your identity using a passport, bank details, or credit reference data.
3. Navigating to the Correct Tax Year
- From your HMRC dashboard, select ‘Self Assessment’.
- Choose ‘Complete your tax return’.
- Select the 2024–2025 tax year(which covers income from 6 April 2024 to 5 April 2025).
4. Filling in Income Details (Sales, Freelance, etc.)
You will need to report all your incomefrom self-employment and other sources:
- Select ‘Self-employment’ under income types.
- Enter your business income (gross turnover).
- If you have more than one business or source, enter each separately.
- Also include any other income (e.g., rental, dividends, pensions, etc.) in their respective sections.
5. Declaring Business Expenses and Allowable Deductions
This step reduces your taxable income:
- Choose simplified expenses or detailed (actual) costs.
- Common allowable expenses include:
- Office costs (e.g., stationery, software)
- Travel (excluding personal travel)
- Business vehicle use (fuel, mileage)
- Utilities (if working from home)
- Marketing and advertising
- Insurance, legal and financial costs
- HMRC provides a full list of allowable expenses.
6. Calculating Tax Owed or Refund Due
- Once you enter all income and expenses, HMRC will automatically calculate:
- Your total taxable profit
- Income tax due based on your tax band (20%, 40%, or 45%)
- Class 2 and Class 4 National Insurance Contributions (NICs)
- If you’ve overpaid or are due a refund (e.g., from PAYE or previous tax returns), it will show here.
7. Submitting the Return and Making Payment
- Carefully reviewyour entries before submission.
- Click ‘Submit’ to file the return.
- HMRC will send you a confirmation and a summary of the amount due.
- Payment deadline:31 January 2026
- Pay via debit/credit card, bank transfer, or set up a direct debit.
- You can also set up a payment plan if you’re unable to pay in full.
Common Tax-Deductible Expenses for Sole Traders
As a UK sole trader, you’re entitled to deduct legitimate business costs from your income before calculating your tax. This reduces your taxable profit and ultimately lowers your tax bill. Below are common tax-deductible expense categories approved by HMRC:
1. Office and Home Working Costs
If you work from home or rent office space, you can claim:
Office Rent & Utilities (if applicable):
- Office rent
- Electricity and heating
- Business rates (if you pay them separately)
Home Office (if working from home):
You can either:
- Use simplified expenses: a flat rate based on hours worked from home (e.g., £10/month for 25–50 hrs/week)
- Or calculate the actual portion of home bills used for business:
- Heating, electricity, water Mortgage interest or rent Council tax
- Internet access
Only claim the business-use percentage of shared costs.
2. Travel and Vehicle Expenses
If you travel for business (not commuting to a regular place of work), you can claim:
Travel:
- Train, bus, and taxi fares
- Hotels (if staying overnight)
- Meals while away on business
Vehicle:
You can either:
- Claim mileage using simplified rates (e.g., 45p/mile for the first 10,000 miles)
- Or claim a proportion of actual vehicle costs: Fuel, Insurance, Repairs and Maintenance, Road tax, MOT.
Regular commuting costs or personal travel are not allowed
3. Phone, Internet, and Software
Claim the business-use portion of:
- Mobile phone bills
- Landline and broadband
- Business-related apps and subscriptions (e.g., Xero, QuickBooks, Microsoft 365)
If using a personal phone or internet, only the percentage used for business is claimable.
4. Marketing and Advertising
If you are promoting your business, these costs are deductible:
- Website hosting and design
- Social media ads (Facebook, Instagram, Google, etc.)
- Flyers, business cards, and printed materials
- Sponsorships (if clearly linked to your business)
- Branding materials (logos, signage, etc.)
Expenses allowed for deduction are those that are of direct promotion of your services while Expenses not allowed for deduction are those of entertaining clients or personal gifts.
5. Professional Services (e.g., Accountant Fees)
You can deduct the cost of hiring professionals to help run your business. For example, Accountants and bookkeepers, Legal advisers or solicitors (for business matters), Consultants and business coaches and HR or payroll services.
Always keep invoices and receipts for all professional services to back up these expenses.
Tips to Avoid Penalties and Mistakes
Filing your Self-Assessment tax return correctly and on time is crucial to avoid fines, interest, and HMRC scrutiny. Here are key practices to help you stay compliant and stress-free:
1. Double-Check All Figures
Accuracy matters: Ensure all income, expenses, and tax relief claims are correct. If there are mistakes in figures can result in: Overpaying tax, Underpayment penalties and Delays in processing refunds. Use a calculator or spreadsheet to cross-verify totals, and always review your return before submitting.
For better results, compare current figures with the previous year to spot unusual differences.
2. Save Digital and Physical Records
HMRC requires you to keep records for at least 5 years after the 31 January submission deadline. Store both digital (PDF, Excel, scanned receipts) and paper copies of Invoices and receipts, Bank statements, Mileage logs and Utility bills used for deductions. It’s beneficial to organize by category and month to save time during audits or amendments.
3. File Early to Avoid Last-Minute Issues
The deadline to file online is 31 January 2026, but don’t wait until then. Filing early gives you time to correct mistakes, reduces stress during peak season and allows more time to plan and pay any tax due. Also, it’s worth noting that HMRC systems often slowdown in January due to high traffic so it’s best to avoid it by filling early.
4. Use Accounting Software or Hire a Tax Advisor
Digital tools like QuickBooks, Xero, FreeAgent, or Sage help you to Track income and expenses, automatically calculate VAT and NI and Generate reports and export data to HMRC.
While Accountants and tax advisors can help maximize your deductions, ensure compliance with evolving tax laws and save you time and reduce the risk of penalties. Even if you’re tech-savvy, a quick review by a pro can prevent costly errors.
What Happens After You Submit?
Once you’ve completed and submitted your Self-Assessment return through HMRC’s online portal, here’s what you can expect:
1. Payment Instructions
- If tax is due, HMRC will display your final balance and provide payment options.
- Deadline for payment: 31 January 2026
- You can pay via:
- Bank transfer (Faster Payments, BACS, CHAPS)
- Debit or credit card
- Direct Debit (one-off or regular)
- Bank/building society (using a payslip)
- Personal tax account(via HMRC online services)
If you owe more than £1,000 and less than 80% of your tax was collected via PAYE, you may also be required to make Payments on Account toward the following year. If you can’t pay in full, HMRC offers a Time to Pay arrangement. This allows you to set up a monthly payment plan.
2. Confirmation from HMRC
After submission, HMRC will issue an instant confirmation on screen. You’ll also receive a confirmation email, a PDF copy of your submitted return (can be downloaded from your online account). The confirmation includes, date of submission, reference number and amount due or refundable. It’s advisable to download and save your confirmation and return for your records.
3. What to Do if You Made an Error
If you notice a mistakein your return, you can:
Amend it online through your HMRC account within 12 months of the 31 January deadline (i.e., by 31 January 2027 for the 2024–2025 tax year).
Navigate to: Self Assessment > More Self Assessment details > Amend Return
For older returns or complex errors, you may need to write to HMRC or call the Self-Assessment helpline. If the correction changes your tax liability, you’ll either receive a new bill or a refund adjustment.
4. Dealing with HMRC Inquiries or Audits
HMRC may randomly or selectively review your return; this is called a compliance check or inquiry.
You might receive a letter asking for: Proof of income (e.g., bank statements, invoices), Receipts or breakdowns of claimed expenses, Explanations for discrepancies
If selected, respond promptly and accurately, Cooperate professionally because delays or evasiveness can lead to penalties and consider involving an accountant if it becomes complex.
HMRC typically opens inquiries within 12 months of the filing date, and most are resolved quickly if records are in order.
Conclusion
Filing your Self-Assessment tax return doesn’t have to be stressful, with the right preparation, tools, and understanding of the process, UK sole traders can stay compliant and even uncover tax-saving opportunities.
Frequently Asked Questions (FAQs)
1. Who needs to file a Self-Assessment tax return?
You must file a Self-Assessment tax return if you:
- Are a sole trader and earned more than £1,000 in the tax year (6 April 2024 to 5 April 2025)
- Are a partner in a business partnership
- Receive untaxed income (e.g., rental, dividends, crypto, or overseas income)
- Need to claim tax relief (e.g., on pension contributions or charitable donations)
2. What is the deadline for filing the 2024–2025 tax return?
- Register for Self-Assessment: by 5 October 2025
- Paper return deadline:31 October 2025
- Online filing and payment deadline:31 January 2026
3. What if I make a mistake on my return?
You can amend your return online via your HMRC account up to 12 months after the deadline, which means until 31 January 2027 for the 2024/25 return.
For older errors or if the online system doesn’t allow changes, contact HMRC directly by phone or post.
4. How do I pay my Self-Assessment tax bill?
You can pay:
- Online using debit/credit card or bank transfer
- Through your HMRC online account
- By setting up a Direct Debit or a Time to Pay plan (for instalments)
- At a bank or by post (using a payslip)
5. Do I have to pay National Insurance as a sole trader?
Yes. Sole traders pay:
- Class 2 NICs if your profits exceed £6,725 — £3.45/week
- Class 4 NICs on profits over £12,570:
- 9% on £12,571 to £50,270
- 2% on profits above £50,270
Both are calculated automatically by HMRC during the Self-Assessment process.
6. What records should I keep for Self-Assessment?
You should keep:
- Invoices and receipts (sales and purchases)
- Bank statements
- Mileage logs and travel receipts
- Utility bills (if working from home)
- Records of any other income or gains
Keep all records for at least 5 years after the filing deadline.
7. Can I file my Self-Assessment on my phone?
Yes. HMRC provides an official HMRC app and a mobile-friendly website where you can:
- View your tax account
- Check your balance
- Make payments
However, for full return submissions, it’s recommended to use a desktop or laptop for ease and accuracy.
8. What happens if I don’t file or pay on time?
Late filing and payment result in automatic penalties:
- £100 fine if you’re even one day late
- Additional penalties at 3, 6, and 12 months
- Interest charges on late payments
HMRC may also estimate your tax (“determination”) and pursue legal action if ignored.
9. Do I need an accountant to file my Self-Assessment?
No — many sole traders handle it themselves, especially with accounting software. However, an accountant can help:
- Maximise your tax savings
- Prevent costly errors
- Offer peace of mind during HMRC inquiries
10. Will I receive a tax refund if I’ve overpaid?
Yes. If you’ve overpaid (e.g., through PAYE, CIS deductions, or incorrect estimates), HMRC will notify you of the refund amount after submission. You can request it via:
- Bank transfer
- Cheque
- Credit toward your next tax bill
Refunds usually arrive within 5–10 working days if claimed online.