Self-Employed Tax Return 2025/26: Step-by-Step Filing Guide

Who needs to file a 2025/26 Self Assessment return?

The 2025/26 tax year runs from 6 April 2025 to 5 April 2026. You must file a return if you:

• Were self-employed with trading income above £1,000
• Had total income above £100,000 (the Personal Allowance tapers from this level)
• Had capital gains above the £3,000 Annual Exempt Amount
• Received rental income above £2,500 net of expenses (or above £10,000 gross)
• Received untaxed income above £2,500 (freelance, dividends above the allowance, foreign income)
• Were a company director (unless your only income was PAYE salary from the company)
• Had foreign income that has not been fully taxed at source

If you are newly self-employed: register with HMRC by 5 October 2026 (5 October after the end of the tax year you first became self-employed). Missing this deadline can itself trigger a penalty.

Step 1: Gather your records

For the 2025/26 tax year (6 April 2025 – 5 April 2026) you will need:

Income records:

• Invoices issued and payment receipts
• Bank statements showing business income
• Any PAYE P60 or P45 from employed positions in the year
• Savings interest statements (from banks)
• Dividend statements

Expense records:

• Receipts for business purchases
• Mileage log (date, journey, business purpose, miles)
• Home office log if claiming actual costs
• Professional subscription invoices
• Bank statements to reconcile

Good record-keeping throughout the year makes filing take an hour. Doing it retrospectively in January takes much longer and risks missing deductions.

Step 2: Calculate your allowable expenses

Allowable expenses reduce your taxable profit. Only claim expenses that are wholly and exclusively for business. Mixed-purpose expenses can be partially claimed where a reasonable business proportion can be identified.

Mileage allowance

The simplified mileage rates for 2025/26:

• First 10,000 business miles: 45p per mile
• Above 10,000 miles: 25p per mile
• Motorcycles: 24p per mile
• Bicycles: 20p per mile

Record every business journey: date, start/end point, purpose, miles. A mileage app (Dext Mileage, TripLog, or a simple spreadsheet) makes this painless.

Home office

Two options:

1. Flat rate: £6/week = £312/year. No records required.
2. Actual costs: calculate the business proportion of rent/mortgage interest, utilities, broadband. Divide total costs by number of rooms; multiply by days/hours worked from home.

Most sole traders earning under £60,000 find the flat rate simpler and nearly as valuable.

Other commonly claimed expenses

• Software and subscriptions: business tools, accounting software, cloud storage
• Training: courses and certifications directly related to your current trade (not career change training)
• Equipment: computers, phones, cameras, tools — either as capital allowances or if small, revenue expenses
• Professional services: accountant fees, solicitor fees for business matters
• Marketing: website costs, advertising, business cards
• Phone: the business use proportion of your phone bill (e.g. 70% if mainly for work)
• Professional indemnity and business insurance

Gift Aid: commonly forgotten

If you made charitable donations via Gift Aid in 2025/26, declare them on your return. As a higher-rate (40%) taxpayer you can claim an additional 20% relief on the gross donation. For example, a £1,000 Gift Aid donation (£80 collected from HMRC for the charity) also entitles you to claim £250 back (or reduce your tax bill).

Step 3: Access HMRC's Self Assessment portal

Go to gov.uk/log-in-register-hmrc-online-services. From April 2026, HMRC is migrating users to HMRC Online via GOV.UK One Login. If you already have a Government Gateway account, it will continue to work — but follow any prompts to link it to your One Login.

You will need your:

• Unique Taxpayer Reference (UTR) — 10-digit number on previous tax returns or your registration letter
• National Insurance number
• Bank account details for refund payments

Step 4: Complete the correct forms

The main return is the SA100. Depending on your income sources, you may also need:

For most sole traders with one business and no property income, you need SA100 + SA103S (short version, if turnover below £85,000).

SA103 key fields:

• Total business income (turnover)
• Total allowable expenses (or a single figure using simplified expenses)
• Net profit = income minus expenses
• Class 4 NI is calculated automatically based on profit

Step 5: National Insurance for 2025/26

Class 2 NI was abolished from April 2024. For 2025/26:

• Class 4 NI: 9% on profits between £12,570 and £50,270, then 2% above £50,270

Wait — the question is about 2025/26 rates. For 2025/26, Class 4 NI: 6% on profits £12,570–£50,270, 2% above. (The rates changed for employed workers but Class 4 NI rates differ — check the specific SA103 guidance for that year.)

Note: Class 2 NI was abolished from April 2024. State Pension entitlement is now protected by crediting through Class 4 contributions.

Step 6: Pay your tax bill

Tax and NI for 2025/26 is due by 31 January 2027. Payment options:

• Bank transfer (faster payments — same day)
• Direct Debit (set up in advance via your Personal Tax Account)
• Debit card via gov.uk
• BACS (allow 3 days)

Note: HMRC does not accept credit cards. Do not use premium-rate numbers to make payments — only use the official gov.uk payment service.

Payments on Account

If your 2025/26 tax bill (excluding Class 2/4 NI, already abolished) exceeds £1,000, HMRC automatically requires Payments on Account toward your 2026/27 bill:

• 1st payment on account: 50% of 2025/26 bill — due 31 January 2027 (same date as the balance of 2025/26)
• 2nd payment on account: 50% of 2025/26 bill — due 31 July 2027

Your first Self Assessment filing can therefore cost 150% of your current year's tax in a single January. Budget for this.

If you expect 2026/27 income to be lower, you can apply to reduce Payments on Account via your Personal Tax Account.

Making Tax Digital for Income Tax (MTD ITSA)

From 6 April 2026, sole traders and landlords with gross income above £50,000 must comply with MTD ITSA:

• Keep digital records using HMRC-compatible software (Xero, QuickBooks, FreeAgent, Sage, ANNA, etc.)
• Submit quarterly summaries of income and expenses to HMRC
• File an End of Period Statement (EOPS) instead of, or alongside, the annual SA return

If your income is above £50,000 and you have not yet set up MTD-compatible software, this is urgent — the mandatory period began 6 April 2026.

Those with income between £30,000 and £50,000 join MTD ITSA from April 2027.

Most commonly missed deductions

1. Working from home: thousands of sole traders forget the £312/year flat rate
2. Mileage: petrol receipts don't count — mileage allowance often produces larger deductions
3. Gift Aid: higher-rate taxpayers lose this relief every year by not declaring donations
4. Professional subscriptions: industry memberships and trade journal subscriptions
5. Bank charges: business bank account fees are deductible
6. Prior-year losses: losses from earlier years can be carried forward and set against this year's profit

Sources

• HMRC: Self Assessment tax returns — gov.uk
• HMRC: Register for Self Assessment — gov.uk
• HMRC: Making Tax Digital for Income Tax — gov.uk
• HMRC: Self-employed expenses — gov.uk
• HMRC: Mileage allowance payments — gov.uk