For many people in the UK, the biggest confusion around tax is understanding whether they actually need to complete a Self Assessment. Most UK taxpayers use PAYE (Pay As You Earn), so their income tax is deducted automatically by their employer or pension provider. But that’s not the whole picture.
About 1.1 million taxpayers missed the deadline in 2024-2025 meaning they risked automatic penalties, reported by BBC
You might be employed, self-employed, renting out a room, earning freelance income on the side, or receiving dividends and suddenly, HMRC rules feel overwhelming. This guide breaks down exactly who needs to do Self Assessment, when you need to do a Self Assessment, and the full Self Assessment requirements in the UK.
What Is Self Assessment?
Self Assessment is HMRC’s system for collecting Income Tax from individuals whose tax isn’t deducted automatically through PAYE. For employees, tax is usually taken directly from wages, meaning they don’t need to worry about complex forms. But if even a small portion of your income has not been taxed from freelancing, rental income, dividends, or investments HMRC requires you to declare it yourself. It’s all part of HMRC’s shift towards Making Tax Digital (MTD ITSA). From April 2026, self-employed individuals and landlords earning over £50,000 will need to keep digital records and submit quarterly updates. Those earning over £30,000 will follow in April 2027.
Self Assessment ensures:
- All income is declared
- Allowable expenses are claimed
- The correct tax is paid
Unlike PAYE, where everything is calculated behind the scenes, Self Assessment puts the responsibility on you to report every source of income, claim allowable expenses, and calculate any tax due.
Do I need to file a Self Assessment?
Below is the complete, detailed breakdown of who needs to do Self Assessment according to GOV.UK.. If any of these apply, you almost certainly need to file.
1. Self-Employed (Sole Traders)
If you earned £1,000 or more from self-employment in a tax year, you must file.
This includes:
- Freelancers
- Independent contractors
- Side hustles
- Occasional paid projects
Even small jobs that didn’t feel like “real business” still trigger the requirement.
2. Partners in a Business Partnership
If you’re part of a partnership, each partner must file a Self Assessment tax return, and the partnership submits its own return.
3. Anyone With Untaxed Income
If you receive income that hasn’t been taxed at source, you must declare it. This includes:
- Rental income from UK or overseas property
- Dividends above your annual allowance
- Investment income such as stocks, interest, crypto, royalties
- Tips or commission
- Income from abroad, including online platforms
- Side income not taxed under PAYE
4. High-Income Child Benefit Charge
If you or your partner earns over £50,000 and receives Child Benefit, you must file a Self Assessment to pay the High-Income Child Benefit Charge.
5. Capital Gains Tax Events
Selling assets for profit such as shares, crypto, property, or even valuable items may create a taxable gain.
If you’ve made gains above the CGT allowance, you must complete a Self Assessment.
6. HMRC Asks You to File
HMRC sometimes issues a “Notice to File” even if your situation seems simple.
If this happens, you must complete a Self Assessment unless HMRC agrees to withdraw it.
7. Company Directors
Not all directors must file, but if you receive dividend income, rental income, benefits, or anything that isn’t fully taxed through PAYE, you’re expected to file a return.
When Do I Need to File a Self Assessment?
The UK tax year runs from 6 April to the following 5 April, and if it’s your first time filing a Self Assessment, you must register by 5 October. Once registered, it’s important to keep the submission deadlines in mind: paper returns must be submitted by 31st October, while the more common online returns are due by 31st January.
Any tax owed must also be paid by 31st January. These deadlines are critical, missing them can result in automatic penalties, even if you don’t owe any tax.
Common Situations Where People Don’t Realise They Need to File
Here are areas where HMRC expects you to complete a tax return, but most people don’t know:
- Selling crypto
- Renting out a room under the Rent-a-Room Scheme
- Making money through online platforms (Etsy, Fiverr, YouTube, TikTok)
- Being a non-UK resident with UK income
These are major reasons for missing returns and unexpected penalties.
What Happens If You Miss the Self Assessment Deadline?
Missing HMRC’s Self Assessment deadlines can quickly become costly, even if you don’t owe any tax.
The moment you miss the filing deadline, HMRC issues an automatic £100 penalty, regardless of your tax liability. If your return remains outstanding for more than three months, daily penalties begin to accumulate, adding significant costs over time. After six months, HMRC can charge additional penalties based on a percentage of the tax owed, and a further percentage again if the return is still not submitted after twelve months.
These fines can escalate quickly, turning a simple oversight into an expensive problem. This is why filing early rather than waiting until January is strongly recommended to avoid stress, system delays, and unnecessary penalties.
Can HMRC Find Out About Income If I Don’t Tell Them?
Yes, HMRC can easily detect undeclared income. They use an advanced data-matching system called Connect, which analyses over 55 billion pieces of data from multiple sources to flag anything that doesn’t match your tax return.
Connect gathers information from:
- Employment and pension records
- UK banks and over 60 overseas financial institutions
- Savings, investments, dividends and interest
- Credit and debit card transactions
- Online platforms like eBay, Etsy, Airbnb and Uber
- Land Registry property records
- Public social media activity
With this level of data, even small amounts of undeclared income are likely to be identified, which can lead to penalties and investigations.
FAQs
When do Self Assessment tax returns need to be submitted?
31 October (paper returns)
Tax year ends 5 April
You can file anytime after 6 April and filing early is strongly recommended.
What is the difference between PAYE and Self Assessment?
Self Assessment = you declare income that hasn’t been taxed.
They are different systems and can sometimes apply to the same person.
Do I need to complete a Self Assessment if I’m self-employed?
Do I need Self Assessment for occasional freelance work?
Even occasional or one-off work counts as self-employment in HMRC’s eyes.
If under £1,000, the trading allowance may cover you but only if you have no other untaxed income.
Conclusion: Do YOU Need to File a Self Assessment?
Ask yourself the following:
- Did I earn £1,000+ from self-employment or freelance work?
- Do I rent out property?
- Did I receive dividends or investment income?
- Do I have foreign income?
- Did I sell anything and make capital gains?
- Do I earn £50,000+ and claim Child Benefit?
- Do I have any untaxed income at all?
- Did HMRC ask me to file?
If yes to any of these, then you do need to file a Self Assessment.
If no, and all your income was taxed through PAYE, you likely don’t need to complete a tax return.
Let Reflex Accounting Handle Your Self Assessment
Feeling overwhelmed by Self Assessment deadlines or unsure what income to declare?
Reflex Accounting makes filing simple, accurate, and stress-free.
We handle everything from identifying income and claiming expenses to filing your return early.
Stay fully compliant, avoid penalties, and ensure you never overpay tax.
Book your free consultation today and let us take the stress out of tax season.
