Self-Assessment
Complete guide to UK self-assessment tax - bands, allowances, NI contributions, and deadlines for 2025/26.
Tax Year 2025/26#
The UK tax year runs from 6 April 2025 to 5 April 2026. As a sole trader, you pay Income Tax and National Insurance on your self-employment profits.
Income Tax Bands#
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 - £50,270 | 20% |
| Higher Rate | £50,271 - £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
The Personal Allowance reduces by £1 for every £2 above £100,000. At £125,140 it reaches zero.
National Insurance#
Class 2 NIC#
- Rate: £3.45/week (£179.40/year)
- Threshold: Only if profits exceed £12,570
- Voluntary from April 2024
Class 4 NIC#
| Band | Profits | Rate |
|---|---|---|
| Below lower limit | Up to £12,570 | 0% |
| Basic band | £12,571 - £50,270 | 6% |
| Above upper limit | Over £50,270 | 2% |
SA103 Box Reference#
| Box | Category | TaxMTD Category |
|---|---|---|
| 15 | Turnover | income |
| 16 | Cost of goods | goods-materials |
| 17 | CIS deductions | construction |
| 18 | Staff costs | staff |
| 19 | Premises | premises |
| 20 | Repairs | repairs |
| 21 | General admin | office-equipment |
| 22 | Motor expenses | transport-travel |
| 23 | Travel & subsistence | transport-travel |
| 24 | Advertising | marketing |
| 25 | Interest & charges | legal-financial |
| 26 | Accountancy & legal | legal-financial |
| 27 | Other expenses | other-allowable |
Simplified Expenses#
| Item | Rate |
|---|---|
| Business mileage (first 10k) | 45p/mile |
| Business mileage (over 10k) | 25p/mile |
| Working from home (25-50 hrs/mo) | £10/mo |
| Working from home (51-100 hrs/mo) | £18/mo |
| Working from home (101+ hrs/mo) | £26/mo |
Deadlines#
| Deadline | Date | What |
|---|---|---|
| Register | 5 Oct 2026 | New businesses |
| Paper return | 31 Oct 2026 | Postal submission |
| Online return | 31 Jan 2027 | Digital submission |
| Tax payment | 31 Jan 2027 | Balancing payment |
| 1st on Account | 31 Jan 2027 | 50% estimated |
| 2nd on Account | 31 Jul 2027 | 50% estimated |
Payments on Account#
If your tax bill exceeds £1,000 and less than 80% was collected at source (PAYE):
- 1st payment: 31 January (50% of previous year)
- 2nd payment: 31 July (50% of previous year)
- Balancing payment: 31 January following year
Record Keeping#
HMRC requires records for 5 years after the 31 January deadline:
- All sales and income
- All purchases and expenses
- VAT records (if registered)
- Bank statements and receipts
- Mileage logs