Do Self-Employed People Need Self Assessment? 2026/27 Guide

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Table of Contents

The £1,000 trading allowance
Gross income versus profit
Activities that can be self-employment
Registration deadline for 2026/27
Filing and payment deadlines
What to report
Allowable expenses
Income Tax and National Insurance
Payments on account
Making Tax Digital for Income Tax
Records to keep
When you may need a return below £1,000
If you started and stopped in the same year
Example
Frequently asked questions

Updated for 2026/27. You normally need to register for Self Assessment if your gross self-employment income is more than £1,000 in the tax year. The test uses income before expenses, not taxable profit. Exceptions and other filing reasons can apply even below that amount.

The £1,000 trading allowance

If total gross trading income for 6 April 2026 to 5 April 2027 is £1,000 or less, the trading allowance may mean no Self Assessment registration is needed for that income. The allowance has restrictions, including certain income from an employer, partnership or connected company.

If gross income exceeds £1,000, report the trade and choose between deducting allowable actual expenses or the £1,000 trading allowance where eligible. You cannot deduct both against the same income.

Gross income versus profit

Gross income is the total amount received or earned from customers before fees and costs. Profit is income less allowable deductions. A freelancer with £4,000 sales and £3,500 expenses has only £500 accounting profit but still exceeds the £1,000 gross-income registration test.

Activities that can be self-employment

Freelance and consultancy work
Construction, delivery and driving services
Online marketplace or social-media trading
Buying goods to resell at a profit
Content creation, subscriptions and sponsorship
Professional, creative or technical services
Casual work organised as a commercial activity

Selling unwanted personal possessions is not automatically trading. HMRC considers intention, frequency, organisation, profit motive and how items were acquired.

Registration deadline for 2026/27

If you need Self Assessment and HMRC has not already required a return, notify HMRC by 5 October 2027. Register earlier so there is time to receive a UTR, activate access and appoint an agent. An existing taxpayer should add the self-employment source rather than applying for an unnecessary second UTR.

Filing and payment deadlines

Paper return: normally 31 October 2027
Online return: normally 31 January 2028
Balancing payment: normally 31 January 2028
Second payment on account: where applicable, 31 July 2028

Submitting early does not bring the normal payment date forward, and it gives time to budget and correct records.

What to report

Report gross business income, allowable expenses or trading allowance, capital allowances where applicable, other business adjustments and any grants or miscellaneous receipts that belong to the trade. The return must also include other reportable employment, rent, savings, dividends, gains and foreign income.

Allowable expenses

Common costs include office expenses, business travel, professional fees, insurance, marketing, software, staff and the business portion of mixed-use bills. Private expenditure, ordinary commuting, client entertaining and capital costs that follow separate rules are not ordinary deductions.

Income Tax and National Insurance

Income Tax applies to taxable profit after available allowances and other income are considered. Class 4 National Insurance may apply above the relevant profit threshold. Class 2 is no longer a mandatory charge for most self-employed people, but qualifying profits can give National Insurance credit and voluntary contributions may be considered where profits are low.

Payments on account

If the relevant Self Assessment liability exceeds the statutory threshold and insufficient tax was collected at source, two advance payments toward the next year can be due. Each is normally half the previous year’s qualifying liability. First-year taxpayers can therefore face a balancing payment and first advance instalment together on 31 January.

Making Tax Digital for Income Tax

MTD for Income Tax starts from April 2026 for sole traders and landlords with qualifying income above £50,000, extends above £30,000 from April 2027 and above £20,000 from April 2028. People in scope must keep digital records and use compatible software for required quarterly updates and year-end reporting.

Records to keep

Sales invoices, platform statements and cash receipts
Expense invoices and bank transactions
Mileage and home-working calculations
Asset purchases and disposals
Stock and work-in-progress information where relevant
Copies of returns, calculations and payment receipts

Business Self Assessment records are generally kept for at least five years after the 31 January filing deadline. Longer periods can apply for late returns, losses or enquiries.

When you may need a return below £1,000

You may choose or need to file to claim a loss, pay voluntary National Insurance, support certain finance or benefit evidence, or because HMRC has issued a notice to file. Other income or gains can independently create a filing obligation.

If you started and stopped in the same year

Report the actual start and cessation dates and final business figures. Tell HMRC that the trade ended, but do not cancel other tax registrations without checking VAT, PAYE or CIS obligations. Payments on account may be reduced if the following year’s liability is genuinely lower.

Example

Leah earns £3,600 from tutoring in 2026/27 and has £700 of costs. Because gross income exceeds £1,000, she registers by 5 October 2027. She compares the £700 actual expenses with the £1,000 trading allowance, files online by 31 January 2028 and pays tax based on the full return.

Use HMRC’s official Self Assessment checker and self-employed registration service. Our self-employed expenses checklist explains common deductions.