How to Report Untaxed Income: 2026/27 UK Guide

Updated for 2026/27. Untaxed income is income on which tax has not already been fully deducted. It may need to be reported through Self Assessment, an HMRC online service, PAYE coding or another route. The correct method depends on the source, amount and your wider circumstances.

Common types of untaxed income

• Self-employment, freelance and side-hustle receipts
• Rental income and income from short-term letting
• Bank interest and investment distributions not fully covered by allowances
• Dividends
• Foreign income
• Tips, commission and casual earnings not put through payroll
• State Pension or private pension income not fully collected through PAYE
• Income from trusts, estates or online platforms
• Cryptoasset income, staking or rewards in relevant circumstances

Capital gains are reported separately from income, although the same transaction can sometimes contain both elements.

Check whether an allowance covers it

The trading allowance can exempt up to £1,000 of gross annual trading income, and the property allowance can cover up to £1,000 of gross property income, subject to conditions and exclusions. These are based on gross receipts, not profit. You cannot always combine an allowance with actual expenses or use it in connected-party arrangements.

Savings interest may fall within the starting rate for savings or Personal Savings Allowance. Dividends have a separate dividend allowance. Tax-free does not always mean the amount can be ignored when checking bands, adjusted net income or filing obligations.

When Self Assessment is normally needed

You may need a return if you are self-employed with gross trading income above £1,000, receive substantial property or investment income, have foreign income, owe the High Income Child Benefit Charge, are a partner, or meet another HMRC filing criterion. Use HMRC’s current checker because thresholds and routes can change.

For the tax year ending 5 April 2027, tell HMRC by 5 October 2027 if you need to register for Self Assessment and have not already been asked to file. The usual online return and balancing-payment deadline is 31 January 2028.

Reporting smaller amounts without a return

HMRC may be able to collect tax on some savings, pension, property or other income through a PAYE code or direct online reporting. Do not assume coding is suitable: check that the estimate and tax year are correct, and retain HMRC’s confirmation. If HMRC issues a notice to file, a return is required unless the notice is formally withdrawn.

Self-employment and online platforms

Income received through marketplaces, delivery apps, social media, digital services or selling platforms is tested under the same tax principles as offline income. Platform reporting to HMRC does not replace your obligation to keep records and report accurately. Selling personal possessions at a loss is not automatically trading, but frequent organised buying and reselling may be.

Property income

Report rent and other receipts, deducting allowable expenses or claiming the property allowance where eligible. Finance-cost relief for individual residential landlords follows special rules. Joint owners normally report their beneficial shares, with separate rules for spouses and civil partners.

Foreign income

UK residents may need to report overseas interest, dividends, rent, pensions or employment income even when the money stays abroad or foreign tax was deducted. Foreign tax credit relief may prevent double taxation. From 6 April 2025, the foreign income and gains regime for qualifying new residents replaced the remittance-basis system, so residence history matters.

Savings and dividends

Banks report UK interest to HMRC, but you should still check the figure. Savings and investment income above £10,000 normally requires Self Assessment. Lower amounts may be dealt with through PAYE or direct contact, depending on the source. Report the full relevant amount so allowances can be applied correctly.

Correcting an omission

If the filing deadline has not passed, amend or complete the appropriate return. A submitted Self Assessment return can normally be amended within 12 months after the filing deadline. Older omissions may require a voluntary disclosure. HMRC’s Digital Disclosure Service can be appropriate for some liabilities, but specialist campaigns or procedures may apply.

Coming forward before HMRC contacts you can reduce penalties, but the disclosure must be complete and calculated correctly. Deliberate or offshore issues have stricter rules and longer assessment periods.

Records to keep

• Invoices, platform statements and sales records
• Bank, savings and investment statements
• Property income and expense evidence
• Foreign tax certificates and exchange-rate calculations
• Contracts, pension statements and benefit notices
• Calculations supporting allowances or expense claims

Example

Nadia earns £2,800 from freelance design in 2026/27 and has £900 of allowable expenses. Because gross trading income exceeds £1,000, she cannot simply ignore it under the trading allowance. She compares actual expenses with the £1,000 allowance, registers by 5 October 2027 if required and reports the chosen calculation by 31 January 2028.

Reporting checklist

1. List every income source for 6 April 2026 to 5 April 2027.
2. Separate income from capital disposals.
3. Check allowances, exemptions and filing criteria.
4. Register or notify HMRC by the applicable date.
5. Report gross figures and allowable deductions consistently.
6. Pay tax and payments on account by the deadline.
7. Retain evidence and amend errors promptly.

Use HMRC’s official Self Assessment checker and guidance on undeclared income. Our Self Assessment filing guide covers self-employment.

Frequently asked questions

Does income below £1,000 always go unreported?

No. The trading/property allowances have conditions, apply to gross income and do not cover every source.

What if tax was deducted overseas?

Reporting may still be required; foreign tax credit relief can reduce double taxation.

Will HMRC already know?

HMRC receives third-party information, but you remain responsible for complete reporting.

This guide is general information. Offshore and deliberate omissions require specialist advice.