Self Assessment explained: deadlines and payments on account

What it is and who files

Tax on wages and pensions is usually taken before you are paid. People and businesses with other income report it in a Self Assessment tax return, and HMRC works out what they owe.

You must send a return if you were a sole trader and earned more than £1,000 in the tax year (before taking off anything you can claim tax relief on), or you were a partner in a partnership, or you owed Capital Gains Tax, or you have other untaxed income such as rent or savings interest. The tax year runs from 6 April to 5 April.

The dates

For the tax year 6 April 2025 to 5 April 2026, the online return and the payment are due by 11:59pm on 31 January 2027.

• 5 October: tell HMRC you need to complete a return, if it is your first one, by registering for Self Assessment.
• 31 October: the deadline for a paper return. Few people use it.
• 31 January: the deadline for an online return and for paying the tax you owe.
• 31 July: the second payment on account, if you make payments on account.

What the bill is made of

For a sole trader, your bill is Income Tax on your profit, Class 4 National Insurance, and a student loan repayment if you have one. Class 4 is 6% on profits between £12,570 and £50,270 and 2% above that. With profits of £7,105 or more, Class 2 is treated as paid.

With a profit of £30,000 in England, Income Tax is £3,486.00 and Class 4 is £1,045.80: a bill of £4,531.80, or about 15% of the profit.

Payments on account

Payments on account are two instalments towards your next tax bill, including Class 4. Each is half of the tax you owed last year. They are due by 31 January and 31 July. You do not make them if last year’s bill was under £1,000, or if you paid more than 80% of it outside Self Assessment.

In your first year you pay the whole bill and the first payment on account together. GOV.UK’s example: a £3,000 bill means £4,500 on 31 January (the £3,000 plus £1,500) and £1,500 on 31 July. For the £4,531.80 bill above, that is £6,797.70 in January, then £2,265.90 in July.

After that the cycle is steady. If you earn more than the estimate, a balancing payment is due the next 31 January: with a £3,000 bill and two payments on account of £900, you owe £1,200 plus the next first payment of £1,500, so £2,700. If you earn less, you may be able to claim some back.

Records and expenses

Keep records of your income and expenses for at least 5 years after the 31 January deadline of the tax year. From 2024 to 2025 the cash basis is the default: you count income when you are paid and costs when you pay them. You can deduct costs that are related to your business, but not money you take for yourself.

There is also a £1,000 trading allowance. With gross trading income of £1,000 or less you may not have to tell HMRC. Above that you can deduct the allowance instead of your actual expenses, but you cannot claim both.

Penalties and how to avoid them

• A late return: £100, then £10 a day after 3 months up to £900, then 5% of the tax due or £300, whichever is greater, at 6 and at 12 months.
• Late payment: 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest.
• Avoid both: register by 5 October, file early, and put a share of every payment aside for tax from the first week.