16 October 2026
Table of contents
Table of contents
HM Revenue and Customs (HMRC) use the Self Assessment system to collect tax on earnings which don’t get taxed elsewhere. The idea of submitting a tax return can be daunting, so in this article we’ll go over what records you need to prepare for Self Assessment before the deadline.
In most cases, anyone working for themselves or receiving untaxed income will need to submit a Self Assessment tax return to tell HMRC about it.
It’s a common misconception, but Self Assessment tax returns aren’t just for self-employed sole traders, and there might be other reasons you need to report untaxed income, such as:
Use HMRC’s online tool to check whether you need to complete a Self Assessment tax return.
If you’re not already registered, and your total self-employed income before tax and any other deductions is less than £1,000 in a tax year, you won’t need to register for Self Assessment or pay tax on the self-employed part of your earnings.
You’ll need to sign up for Self Assessment if your self-employed income creeps over that £1,000 threshold in a tax year – even if it’s just by a penny!
Anyone who registers should keep submitting tax returns each year, even if your income drops back below the trading allowance the following year.
If you expect it to stay below the threshold in subsequent years, you can tell HMRC you no longer need to submit returns.
It's one of the twelvety-trillion reasons why we very strongly recommend (and not just because it's our job) keeping your financial records in decent order. It will help you keep track of where everything is up to, so you know what's needed to stay compliant.
If you do need to complete a tax return, you can register for Self Assessment online. It’s possible to register by post in some limited circumstances, but it’s generally recommended to use the online registration service.
HMRC will send out a Unique Taxpayer Reference number once you’re registered. You’ll need this every time you complete your annual Self Assessment tax return. Keep it safe!
If you’re running a limited company, you’ll already have a UTR number for the company. This is separate to the UTR you’ll use for Self Assessment, so make sure you don’t mix them up.
This will partly depend on your circumstances, so your personalised list could be quite different to someone else’s. It could include:
It’s useful to start digging out everything you need as soon as possible – especially because this means you’ll be able to get your Self Assessment tax return filed sooner!
Bookkeeping is the process of keeping detailed records about every financial transaction which happens in your business. Keeping them well organised will help you keep track of what’s going on, and make it much easier to prepare your tax return without losing your mind.
For most businesses, this means keeping a record of sales and business income, purchases, and other business expenses. Things like invoices, receipts, records of sales, and information about staff wages all need to be recorded in your bookkeeping.
Before you get stuck into your tax return, making sure everything has been recorded correctly! Reconcile your transactions to make sure you haven’t duplicated or missed anything, and weed out any personal spending that might have tip-toed into your business expenses.
Remember that £1,000 Trading Allowance we mentioned? You might still be able to use it against your tax bill – even if you go over the threshold and need to sign up for Self Assessment.
Once registered, you have the choice of either claiming the allowance, or claiming your expenses – not both. The good news is that it’s up to you which you use, so go for the one that reduces your tax bill the most!
Your Self Assessment bill is worked out based on all the income you earn during a tax year, but that doesn’t mean you’ll have to pay tax on the same money twice! Your bill will take into account:
You earn a salary which uses up your tax-free personal allowance and some of the basic rate tax band. You also get income from being self-employed. When you add this on top of your wages it uses up the rest of the basic rate tax band, and some of the higher rate bracket.
It means you’ll pay basic rate tax on the part of your self-employed earnings which are still in the basic rate bracket, and then the higher rate on the rest.
Just like the employment income we used as an example above, you might have other types of income which have already been taxed, but which still need to be included when you’re preparing for Self Assessment.
For example, if you work for a client as if you were an employee, but they pay you through your own limited company, then you might be ‘inside IR35‘. The client will need to deduct tax and National Insurance as if they’re your employer when this happens.
If a contractor pays you for construction work, then they might need to deduct tax under Construction Industry Scheme (CIS) rules
Some sole traders and landlords will be affected by Making Tax Digital for Income Tax, which changes the way some people need to record and report their earnings.
If you’re affected, you’ll need to keep your records digitally, and then use special software to submit updates throughout the year.
While you can still carry on submitting an annual tax return in the same way until the changes come into effect, it might be a good idea to shift to using software now, and avoid the rush later on.
Learn more about using Pandle to make business accounting easier. Create an account today and decide what to do with all the extra time you get back.
A creative content writer specialising across business, finance and software topics. I have a love for all things writing, and creating engaging, easy to understand content that helps everyday people!
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