Self Assessment tax returns can feel stressful, especially when you are not sure whether you need to file, what information to include, what expenses you can claim, or what happens if you cannot pay your tax bill. Understanding the process helps you avoid surprises, keep better records and deal with HMRC with more confidence.
About this episode
Millions of people complete Self Assessment tax returns every year. Some are self-employed, some receive rental income, some have dividends or capital gains, and others have tax situations that need reporting outside PAYE.
In this episode, we explain who may need to complete a tax return, what goes into it, what information you need to gather, what self-employed expenses you may be able to claim, and what to do if you cannot pay the tax due.
If you are self-employed and want a wider foundation first, our episode on Tax basics for self employed: What You Need to Know is a useful starting point.
Why Self Assessment tax returns matter
Self Assessment matters because it puts responsibility on you to report income, claim expenses correctly, calculate the tax position and meet the relevant deadlines.
Filing a return does not always mean you will owe tax. You may have already paid enough through PAYE, or you may even be due a refund. However, if tax is due and deadlines are missed, interest and penalties can follow.
The better your records, the easier the return becomes. Good records also help you claim what you are entitled to and support the figures if HMRC asks questions later.
Key points from this episode
Who needs to complete a Self Assessment tax return?
You may need to complete a Self Assessment tax return if your income has not been fully taxed before it reaches you, or if HMRC needs more information about your income, gains or claims.
This can include self-employed income, rental income, untaxed income, capital gains, partnership income, foreign income, dividends, or certain tax charges such as the High Income Child Benefit Charge.
For self-employed people, it is important to remember that income means sales, fees or turnover before expenses, not just profit.
What goes into a tax return?
A Self Assessment tax return usually has a main section and supplementary pages. The pages you need depend on the type of income or gains you have.
The main part includes personal details, your National Insurance number, your Unique Taxpayer Reference, and details such as savings income, pension payments, Gift Aid claims and dividends.
Supplementary pages may cover employment income, self-employment, partnerships, UK property income, overseas income, capital gains, or residence status.
What records should you gather?
Before you start your return, gather the evidence behind the numbers. Employment income may need documents such as a P60, P45 or P11D. Self-employment income should be supported by accounts, invoices, receipts and bank records.
Rental income should be supported by property records. Capital gains need details of what you sold, when you sold it, what it cost, and any allowable costs connected to the sale.
The key question is simple: can you back up the figures that go into your tax return?
What can self-employed people claim?
If you are self-employed, tax is usually based on your business profits. That means your income less tax-allowable business expenses.
Costs that are wholly and exclusively for business may be allowable. This can include items such as software subscriptions, advertising, business supplies, equipment, and other business-related costs.
Personal costs, such as holidays, cinema trips or personal drawings, are not business expenses. Mixed costs, such as mobile phone use, may need a reasonable business/private split.
Simplified expenses and mileage
Simplified expenses can make some claims easier for sole traders and partnerships. They may apply to areas such as vehicle mileage, working from home, and living at business premises.
For vehicles, you may be able to use mileage rates instead of working out the actual costs of buying and running the vehicle. However, once you choose a method for a vehicle, the choice can affect how you claim in later years.
Working from home can also involve either actual cost calculations or flat-rate methods, depending on your circumstances. Always check the current rates and rules before using old figures from previous tax years.
Key Self Assessment dates
Self Assessment has important dates. You may need to register by 5 October after the end of the tax year. Paper returns usually have an earlier deadline than online returns.
Online tax returns are normally due by 31 January, and tax due is usually payable by the same date. If you want eligible tax collected through your PAYE tax code, an earlier deadline can apply.
The original episode also referred to a specific 2021/22 filing concession. That was time-specific, so the live page should rely on current HMRC dates before publishing.
Payments on account
Payments on account can catch taxpayers by surprise. If your Self Assessment bill is high enough, HMRC may ask you to make advance payments towards the next tax year.
This can make the January payment feel larger than expected because you may have a balancing payment for the year just ended and a first payment on account for the next year.
Our episode on Payments on Account Explained: What They Are, When to Pay and How to Reduce Them goes deeper into how those payments work.
What if you cannot pay your tax?
If you cannot pay your tax bill, do not hide from it. File the return first, then deal with the payment problem.
HMRC may allow a Time to Pay arrangement if you meet the conditions. Interest may still apply, but dealing with the issue early is usually better than ignoring the bill and waiting for HMRC to chase.
If you miss a deadline and penalties become an issue, our episode on HMRC Reasonable Excuse: How to Appeal a Tax Penalty Successfully explains what to consider when challenging a penalty.
What to check before filing
- Do you need to complete a Self Assessment tax return?
- Have you registered and received your Unique Taxpayer Reference?
- Have you gathered employment, self-employment, property and investment records?
- Have you included all relevant income?
- Have you checked whether capital gains need reporting?
- Have you claimed only allowable business expenses?
- Have you checked current simplified expenses rules?
- Have you planned for payments on account?
- Have you saved enough for the tax bill?
- Have you filed before the deadline?
FAQs about Self Assessment tax returns
What is a Self Assessment tax return?
A Self Assessment tax return is how you report income, gains, tax reliefs and tax due to HMRC when your tax position is not fully dealt with automatically.
Who needs to complete a Self Assessment tax return?
You may need one if you are self-employed, receive rental income, have untaxed income, receive dividends, make capital gains, have partnership income or need to report specific tax charges.
What can I claim if I am self-employed?
You can usually claim allowable business expenses that relate to running your business. Personal costs are not allowable, and mixed-use costs may need a reasonable business/private split.
What should I do if I cannot pay my Self Assessment tax?
File the return first, then contact HMRC or check whether a Time to Pay arrangement is available. Ignoring the bill can lead to interest, penalties and more stress.
Episode Timecodes
- 00:00 – Why tax returns can feel stressful
- 00:19 – What we cover in the episode
- 00:58 – Financial awareness, profit, tax and time
- 01:25 – Who needs to complete a tax return?
- 02:40 – How income tax is worked out
- 03:00 – Core return and supplementary pages
- 03:23 – Personal details, UTR, savings, pensions and dividends
- 04:08 – Employment, self-employment, property and capital gains pages
- 04:29 – Information and evidence needed for the return
- 05:51 – What self-employed people can claim
- 06:33 – Mixed expenses and business/private splits
- 06:50 – Capital allowances and equipment
- 07:14 – Entertaining and business meetings
- 07:36 – Simplified expenses
- 08:36 – Vehicle mileage claims
- 09:52 – Working from home claims
- 10:43 – Filing dates and deadline concessions
- 11:03 – What to do if you cannot pay
- 11:23 – Time to Pay arrangements
- 11:45 – Time-specific income support reminder
- 12:02 – Final recap
Related episodes
- Personal Tax Return Explained: Who Needs One, What to Include and Key Dates
- Five mistakes to avoid on your tax return
- Tax basics for self employed: What You Need to Know
Key takeaway
Self Assessment tax returns are much easier to deal with when you know whether you need to file, what information you need, what expenses you can claim and when payment is due.
Do not wait until the deadline. Gather your records, check your tax position, save towards the bill and ask for help early if you cannot pay.
Plan it, Do it, Profit.
“Relax, do the tax, get it sorted, and give yourself time to deal with the numbers properly.”
Further Support
The I Hate Numbers podcast helps business owners understand accounting, tax, finance, profit, cash flow, and business planning in a practical way. We simplify financial topics so you can make better decisions and feel more confident with your numbers.
You can also watch more practical finance and tax support on the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.
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