Limitless Tax
A plain-English guide

File your own
Self Assessment.

Most sole traders, freelancers, and landlords with simple tax affairs pay an accountant £150–£600 for a Self Assessment that they could file themselves in under three hours. This guide walks through the entire process — from registration to payment — in plain English, with links to every official HMRC page.

Reading time · 15 minutes
Process time · ~3 hours
Updated for · Tax year 2026/27

What this could save you

Average UK accountant fee for a simple Self Assessment: £150–£400.

More complex cases with light bookkeeping: £400–£600+.

Filing yourself: £0. Government doesn't charge you to file.

Honest note: This guide is general information, not personal tax advice. It covers straightforward sole-trader and landlord cases. If your situation involves foreign income, partnerships, capital gains on multiple assets, complex share schemes, or you're simply unsure — hire an accountant. £300 well spent beats a wrong return.
What's in this guide
01Register as a sole trader 02Track your income 03Track your expenses 04Calculate profit and tax 05Fill in Self Assessment online 06Pay your tax 07If you earn over £50k (MTD)
STEP 01 10 minutes · one-off

Register as a sole trader.

Before you can file anything, HMRC needs to know you exist as a self-employed person. This is a one-off registration that takes about 10 minutes online.

If you've been trading for more than a few months and your self-employment income exceeded £1,000 in a tax year, HMRC expects you to register. The deadline is 5 October after the end of the tax year in which you started (so if you started trading in June 2026, you must register by 5 October 2027).

What you'll need

  • Your National Insurance number
  • Your address and contact details
  • The date you started trading (approximate is fine)
  • A description of what you do ("graphic designer", "plumber", "property letting")

Where to register

The official sign-up page is at gov.uk/register-for-self-assessment/self-employed. You'll create a Government Gateway account if you don't already have one.

What happens next

Your UTR arrives by post

After registering, HMRC posts a Unique Taxpayer Reference (UTR) to you within about 10 working days. It's a 10-digit number you'll need for every Self Assessment submission from now on. Keep it somewhere safe.

If you miss the deadline

You can still register — but there's a penalty

HMRC charges a failure-to-notify penalty that depends on how much tax was owed and how late you registered. Best practice: register as soon as you know you'll owe tax.

STEP 02 10 minutes per month · ongoing

Track your income.

Every penny that comes into your business counts as turnover. The key is having a reliable record by the end of the tax year. The simplest system beats the cleverest system you'll abandon in March.

The UK tax year runs from 6 April to 5 April of the following year. Everything you invoice and get paid for in that window goes on that year's Self Assessment.

The simplest workflow that works

  • Open a separate bank account for your business (Starling, Tide, and Monzo Business are free)
  • All client payments land in that account and nowhere else
  • Download the monthly statement as CSV
  • At year end, sum all incoming business payments — that's your turnover

This is the approach many sole traders use, and it works because the bank does the record-keeping for you. No spreadsheet heroics, no forgotten invoices.

If MTD applies to you

Digital records become mandatory

If your gross income exceeds £50,000 in 2024/25, you're required to keep digital records from April 2026. A spreadsheet is acceptable, but it must connect to HMRC-recognised software for quarterly updates. See our MTD guide for details.

What counts as income

  • Invoices paid by clients
  • Cash payments (yes, declare them)
  • Tips and gratuities
  • Bartered services (at fair market value)
  • Rental income from UK property (reported separately)

One thing to note: turnover is before expenses. If a client paid you £1,000 and you spent £200 on materials to fulfil the job, your turnover is £1,000, not £800. Expenses come in the next step.

STEP 03 15 minutes per month · ongoing

Track your allowable expenses.

HMRC lets you deduct costs that are "wholly and exclusively" for your business from your turnover. This is where most self-employed people leave money on the table by not keeping proper records.

The rule is simple: the expense has to be for your business, not your personal life. A laptop used only for work is 100% deductible. A laptop used half for work and half for personal use is 50% deductible.

Common allowable expenses

Office costs
Stationery, printing, postage, computer software, office rent
Travel
Train, bus, fuel, parking for business journeys (not commuting). Mileage: 45p/mile first 10,000; 25p/mile after
Equipment
Computers, phones, cameras, tools — business-use proportion only
Phone & internet
Business-use portion of your bill. Easiest: get a dedicated business line
Home office
Simplified flat rate: £10 (25–50 hrs/mo), £18 (51–100 hrs/mo), £26 (101+ hrs/mo)
Professional fees
Accountant fees, legal fees, professional memberships, trade body subscriptions
Marketing
Website hosting, domain names, ads, business cards, networking events
Bank charges
Business account fees, card processing fees (Stripe, PayPal), overdraft interest

Keeping receipts

  • Take a photo of every paper receipt the day you get it
  • Save digital receipts into a folder per tax year
  • A shoebox approach technically meets HMRC rules but makes year-end hell
  • You must keep records for at least 5 years after the 31 January submission deadline
Not allowable

Things you can't deduct

Personal clothing (unless it's a genuine uniform or PPE), meals you'd have eaten anyway, client entertainment, fines and penalties, your own wages or drawings, the personal-use portion of any mixed-use item.

The official list with full detail is at gov.uk/expenses-if-youre-self-employed.

STEP 04 10 minutes · once per year

Calculate your profit and tax.

Once you have your turnover and your expenses, the maths is simple. This is the step where our calculator does the heavy lifting.

The formula

Profit = Turnover − Allowable expenses. That's your taxable income. From there, you pay income tax on the portion above your Personal Allowance (£12,570 in 2026/27), plus Class 4 National Insurance at 6% and 2% above the thresholds.

Worked example

A freelance designer with £45,000 turnover

Turnover: £45,000. Allowable expenses (software, laptop, home office, mileage): £5,200. Taxable profit: £39,800. Income tax: (£39,800 − £12,570) × 20% = £5,446. Class 4 NI: (£39,800 − £12,570) × 6% = £1,633.80. Total due to HMRC: £7,079.80.

Student loans, pension contributions, and other factors change these numbers. Rather than doing it by hand, plug your numbers into our calculator.

Open the calculator →

What you'll end up with

A set of figures you'll need for Step 5: your turnover, your total expenses, your taxable profit, income tax due, Class 4 NI due, and any student loan repayments. Write these down or print them.

STEP 05 45–90 minutes · once per year

Fill in Self Assessment online.

The actual submission. This is where most people panic, but with your numbers calculated from Step 4, you're basically just typing them into the right boxes.

Log into your HMRC account at gov.uk/log-in-file-self-assessment-tax-return. You'll need your Government Gateway user ID, password, and (probably) a code from your phone for two-step verification.

Forms you'll complete

  • SA100 — the main Self Assessment form everyone fills in
  • SA103S — the "short" self-employment supplement (if your turnover was under £85,000)
  • SA103F — the "full" self-employment supplement (turnover £85,000 or more)
  • SA105 — if you have UK rental income
  • SA108 — if you had capital gains

The HMRC system will guide you to the right ones by asking what income you had during the year. You don't need to pick them manually.

The key boxes on SA103S (self-employment short form)

Box 9
Your turnoverTotal income before any deductions
from Step 2
Box 20
Total allowable expensesSum of all business expenses
from Step 3
Box 21
Net profitTurnover minus expenses
from Step 4
Box 28
Taxable profitAfter any adjustments
usually same as 21

If you're using the "simplified expenses" home office method, there's a separate section for that too — Box 17. The system will compute Class 4 NI automatically.

Deadlines that matter

31 January is the big one

The deadline to file your return online is 31 January after the tax year ends (so for 2026/27 income, the deadline is 31 January 2028). Paper returns must arrive by 31 October. Missing the online deadline triggers an automatic £100 penalty, rising with time.

Before you hit submit

Final check
  • Figures match your calculator output
  • Bank details correct (for any refund)
  • Student loan plan ticked (if applicable)
  • Pension contributions claimed if relevant
  • All income sources included (side jobs, interest, dividends)
  • Saved a copy of the submission receipt
STEP 06 5 minutes · twice per year

Pay your tax.

Filing the return doesn't pay the bill. Once HMRC has your return, they confirm how much you owe and give you until 31 January to pay it.

How to pay

  • Bank transfer (Faster Payments) — fastest, usually same-day
  • Debit card — works but counts towards your card's daily limits
  • Direct Debit — set up once, HMRC pulls the amount
  • At the Post Office — yes, still a thing. With paper cheques

The reference you use is your UTR followed by the letter K (e.g. 1234567890K). Using the wrong reference is the most common reason HMRC "loses" payments. Triple-check it.

Payments on account — this catches people out

If you owe more than £1,000, you pay next year's tax in advance

HMRC requires two "payments on account" towards the following year's tax bill, based on this year's. Each is 50% of this year's tax, payable 31 January and 31 July. Your first year in Self Assessment can mean paying 150% of your tax at once (the bill plus the first payment on account). Plan for this.

Official payment page: gov.uk/pay-self-assessment-tax-bill.

STEP 07 Only if gross income > £50,000

If you earn over £50k: Making Tax Digital.

From 6 April 2026, sole traders and landlords with combined gross income above £50,000 must use MTD-compatible software and submit quarterly updates instead of a single annual return.

This doesn't change your tax calculations — the rates, allowances, and thresholds are exactly the same. What changes is the how: digital record-keeping becomes mandatory, and you submit quarterly summaries plus a final declaration rather than one annual Self Assessment.

What's different under MTD

  • Keep digital records throughout the year (spreadsheet is fine, paper isn't)
  • Submit quarterly updates by 7 August, 7 November, 7 February, 7 May
  • Submit a final declaration by 31 January as before
  • Use HMRC-recognised software — Xero, QuickBooks, FreeAgent, Sage, and free tools like My Tax Digital are all approved

The threshold drops to £30,000 in April 2027 and £20,000 in April 2028 — so even if you're not affected this year, you might be within two tax years.

Check if MTD applies to you →

Save your figures to a cheat sheet PDF.

Coming soon — our Premium tool will take the figures from your calculator session and export them as a one-page PDF with every number pre-organised by SA100 box number. Open the HMRC portal in one tab, our PDF in another, copy the figures straight across. No mental gymnastics, no hunting through guidance notes.

Get early access Use the free calculator