Self Assessment for beginners can feel like a collection of unrelated dates, forms and payments. In reality, the process is easier to manage when you separate it into four jobs: confirm whether you need a return, register, keep the evidence, and plan the tax payment.
The expensive surprises usually come from waiting until January. Your first payment can include the full bill for one tax year plus an advance payment towards the next. Starting early gives you time to check the figures and reserve the cash.
Who may need to complete Self Assessment?
People commonly enter Self Assessment because they are self-employed, receive rental income, are a partner in a business, have taxable income that has not been collected through PAYE or need to report a capital gain. Other circumstances can also create a filing requirement.
Do not rely on a friend’s situation or an old threshold. Use HMRC’s online Self Assessment checker, particularly if you have more than one income source, recently sold an asset or received income from overseas.
Current deadlines for the 2025/26 tax return
- 5 October 2026: tell HMRC if you need to complete a return for 2025/26 and have not filed before, or were previously registered but did not need a 2024/25 return.
- 31 October 2026: HMRC must receive a paper return by 11:59pm.
- 30 December 2026: submit online by this date if you want HMRC to consider collecting an eligible bill through your PAYE tax code.
- 31 January 2027: submit the online return and pay the balancing amount and any first payment on account by 11:59pm.
- 31 July 2027: pay the second payment on account, if one is due.
Special cases can have different dates. HMRC maintains the current Self Assessment deadline guidance. Register early because obtaining access details and resolving identity or account issues can take time.
What records should you keep?
The return is the summary; your records are the evidence behind it. The exact documents depend on your income and claims, but a useful starting file includes:
- Sales invoices, till records and other self-employment income
- Business purchase invoices and receipts
- Business bank and credit-card statements
- Employment forms such as P60s and P11Ds
- Pension contribution and Gift Aid records
- Property income, agent statements and allowable cost evidence
- Savings, investment and dividend statements
- Documents for asset purchases and sales
- Student loan, Child Benefit and other relevant information
- Details of tax already deducted, including CIS deductions where applicable
Keep business and private spending separate where possible. Good monthly records make the return quicker, but they also show how the business is performing. Our guide to the importance of bookkeeping explains what reliable records should tell you during the year.
How your Self Assessment bill is calculated
After the return is completed, the tax calculation—often called the SA302—summarises the income, allowances, reliefs and tax due for that year. Your Self Assessment statement then shows payments already made, amounts outstanding, the balancing payment and any payments on account.
Check both documents. The calculation and the amount currently payable are not always the same because the statement may include earlier payments, interest or other charges.
Payments on account in plain English
Payments on account are advance payments towards the next Self Assessment bill. Each is usually half of the relevant tax owed for the previous year. They are due by midnight on 31 January and 31 July.
You do not normally make payments on account if the relevant tax owed for the previous year was less than £1,000, or if more than 80% of the tax was collected outside Self Assessment. Your online account or statement will show whether they apply.
Payments on account generally cover Income Tax and Class 4 National Insurance for the self-employed. Amounts such as Capital Gains Tax and student loan repayments are dealt with in the balancing calculation rather than simply being rolled into the next year’s two instalments.
Why the first January payment can be 150% of the bill
Assume your first relevant Self Assessment bill is £3,000 and no tax was collected in advance. By 31 January, you may need to pay:
- £3,000 for the tax year just completed
- £1,500 as the first payment on account for the following year
The January total is £4,500. A second £1,500 payment is then due on 31 July. The advance payments are credited against the following year’s bill; they are not an additional tax. However, they create a real cash-flow demand in the first cycle.
Build the January and July dates into your cash-flow forecast rather than treating the online filing deadline as the first time to think about payment.
What if your income falls?
You can ask HMRC to reduce payments on account when you reasonably expect the next bill to be lower—for example because profits have fallen, tax deducted at source has increased or additional relief is available.
Estimate carefully. If the payments are reduced too far and the final liability is higher, HMRC can charge interest on the shortfall from the original payment dates. A reduction should be based on current accounts and a defensible forecast, not simply on a desire to postpone the payment.
HMRC explains the calculation and reduction process in its payments on account guidance.
How to make paying less stressful
- Estimate tax from current figures during the year.
- Move a percentage of income into a separate tax reserve each month.
- File soon after the tax year ends instead of waiting until January.
- Compare payments already made with the online statement.
- Use the correct payment reference and allow for the payment method’s processing time.
- If you are up to date, consider HMRC’s Budget Payment Plan for regular weekly or monthly payments towards the next bill.
- Contact HMRC early if you cannot pay in full; do not ignore the return or deadline.
Common first-time Self Assessment mistakes
- Registering too late and assuming account access will be immediate
- Reporting money received but overlooking invoices or allowable costs
- Claiming private spending as a business expense
- Forgetting income from property, investments or overseas sources
- Missing tax already deducted through PAYE or CIS
- Confusing the SA302 calculation with the live account balance
- Reducing payments on account without a reasonable estimate
- Filing without retaining evidence for the figures
Making Tax Digital may change the process
Eligible sole traders and landlords with qualifying self-employment and property income over £50,000 entered Making Tax Digital for Income Tax from 6 April 2026. Lower qualifying-income thresholds follow in 2027 and 2028. People in scope need compatible software, digital records and quarterly updates as well as the year-end tax return process.
If that applies to you, read our guide on choosing accounting software and check HMRC’s current eligibility rules before selecting a product.
Get the first return right
A first Self Assessment return sets the pattern for future payments and records. London Accountants can confirm what must be reported, prepare the calculation, explain the January and July amounts and help you plan ahead. Explore our accounting solutions or contact the team before the deadline becomes urgent.
