The 2025 Guide to Self Assessment & Self Employed Tax Return in the UK

As the self-employed economy in the UK continues to grow—with freelancers, gig workers, and side hustlers booming—understanding your self assessment tax return UK responsibilities has never been more important. With new HMRC thresholds, digital tax updates, and a focus on compliance, this 2025 guide will help you understand exactly what you need to do to stay on the right side of the law.

Whether you’re a full-time freelancer, a part-time eBay seller, or renting out your property on Airbnb, this blog explains how to navigate self employed tax return UK requirements, important deadlines for the self employed tax year, and how to correctly complete your self assessment UK filing.

What Is a Self Assessment Tax Return?

A self assessment tax return is the system used by HMRC (Her Majesty’s Revenue & Customs) to collect income tax from individuals and businesses not taxed at source through PAYE (Pay As You Earn). If you’re self-employed, or if you receive untaxed income (e.g., rental income, dividends, foreign income), you’ll likely need to file a tax return annually.

You’re responsible for reporting:

• All income earned in the self employed tax year

• Allowable business expenses

• Any tax owed

You then pay any tax due by the following January 31st.

Who Needs to File in 2025?

You must file a self assessment tax return UK if:

• You’re self-employed and earned more than £1,000 in trading income in the tax year

• You’re a landlord and received rental income

• You earn additional income outside of employment (e.g., dividends, interest, crypto gains)

• You’re a company director

• Your income exceeds £100,000 annually

🔥 2025 update: The threshold for declaring “side-hustle” or trading income is expected to increase to £3,000 in the 2025–26 tax year. But for the 2024–25 tax year (ending April 2025), the threshold remains at £1,000.

Important Dates for the Self Employed Tax Year 2024–25

Understanding key tax deadlines is essential to avoiding penalties.

Late filing penalties start at £100, even if you owe no tax, and interest applies to late payments.

Step-by-Step: How to File a Self Assessment Tax Return in the UK

Here’s how to handle your self employed tax filing efficiently:

1. Register for Self Assessment

If you’re filing for the first time, register online with HMRC by 5 October 2025. HMRC will send your Unique Taxpayer Reference (UTR) by post. This process can take 10 working days, so act early.

2. Keep Records Throughout the Year

Keeping good digital records helps reduce your tax bill and makes your return easier. Maintain records for:

• Income and sales

• Invoices and receipts

• Allowable expenses (e.g., home office, software, travel)

Use accounting software like QuickBooks, FreeAgent, or Xero for better compliance and MTD readiness.

3. Complete Your Tax Return

Between 6 April 2025 and 31 January 2026, complete the online Self Assessment form via your HMRC portal. You’ll need:

• Your UTR and Government Gateway login

• Breakdown of all income earned

• List of business expenses

• Details of other taxable income

4. Pay Tax and National Insurance

You’ll see your tax bill instantly after submitting. You may need to pay:

• Income Tax on profits over £12,570

• Class 2 NICs: £3.45/week if profits > £6,725

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

💡 If your tax bill exceeds £1,000, HMRC will likely request Payments on Account: two advance payments (due Jan and July) toward next year’s tax.

Key Changes and Trends in 2025

1. Increase in Side Hustle Threshold

HMRC is expected to raise the tax-free threshold for side-hustle income to £3,000 from the 2025–26 tax year. This will reduce the number of people required to file returns just for casual earnings.

2. Digital-by-Default HMRC

HMRC is pushing to reduce paper correspondence. As of mid-2025, most letters are being replaced with digital notifications, so keep your HMRC login and email up to date.

3. Expansion of Making Tax Digital (MTD)

From April 2026, MTD for Income Tax will become mandatory for those earning over £50,000. In 2027, the threshold lowers to £30,000. This means:

• You must keep digital records

• Submit quarterly updates

• Use compatible accounting software

If you’re near this threshold, it’s smart to adopt MTD-compatible tools now.

4. Increased Penalties for Late Payments

HMRC now applies:

• 3% penalty if unpaid 15 days after the deadline

• Additional 3% at 30 days

• Ongoing interest and potential surcharges if unpaid after 30 days

Avoiding Common Self Assessment Mistakes

To make your self employed tax filing smoother, avoid these common pitfalls:

• Filing late or forgetting deadlines

• Not registering on time

• Failing to declare all sources of income (crypto, dividends, Airbnb, etc.)

• Not keeping accurate records or losing receipts

• Ignoring Payment on Account obligations

Self Assessment Tips for Self-Employed Workers

• Set aside 20–30% of your income for tax as you go

• Use separate bank accounts for business and personal finances

• Consider a professional accountant for complex returns

• File your return early to reduce stress and better plan for payments

• Use HMRC’s tax calculator to estimate what you’ll owe

Final Thoughts

Filing your self employed tax return UK doesn’t have to be a headache—especially if you understand the key deadlines, register early, and stay updated with HMRC’s digital shift. Whether you’re earning a little on the side or running a full-time business, filing your self assessment UK correctly keeps you compliant and protects you from costly penalties.

Stay organised. File on time. Keep your finances clean—and 2025’s Self Assessment will be a breeze.