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Self-employed tax return

Find out how what you need to do to file a self-employment tax return - both on paper and online

In this article
How do I pay tax as a self-employed person? How to file a self-employment tax return Self-employed tax return – paper returns Self-employed tax return – online returns
Self-employed tax record-keeping FAQ

How do I pay tax as a self-employed person?

In our short video guide, we review the options available to self-employed people when filling out their tax return - either on paper or online - and explain all the steps involved. 

And you can get a head start on your 2017-18 tax return with the Which? tax calculator - tot up your tax bill, get tips on where to save and submit your return direct to HMRC.

How to file a self-employment tax return

If you need to fill in a self-assessment tax return, HMRC should notify you in April and ask you complete a paper tax return or make an online tax return.

To ensure your tax return is accurate, you are expected to keep records, which you may need to produce if your tax return is queried. These should include details of all your sales and takings, and a record of your purchases and business expenses. 

You should keep your records for a minimum of six years. So, for the 2017-18 tax year, this means you must keep records until 31 January 2024.

But if possible, it might be worth keeping them for 20 years, as this is the time limit for an investigation if HMRC suspects fraud.

Before you complete a tax return, you will need to register for self-assessment. You can do this online. Once you have registered, HMRC will issue you with a 10-digit Unique Taxpayer Reference (UTR) number.  

Find out more: If you need more help with tax, or any other aspect of your finances, try Which? Money for £1 for two months and you can speak to a member of our Money Helpline team to get individual guidance.

Self-employed tax return – paper returns

If you want to send a paper tax return, you need to complete the main return (form SA100) as well as supplementary pages. Supplementary pages are for declaring details of your:

  • income from self-employment (SA103S or SA103F)
  • employment income (SA102)
  • income from UK property (SA105)  
  • other income and gains.

The supplementary pages you need to fill in will depend on your business turnover. If it's below £83,000, you can usually use form SA103S. If it it's above £83,000, use form SA103F. HMRC helpsheets are provided for supplementary pages.

The deadline to submit a paper self-assessment tax return for 2017-18 is 31 October 2018.

See our full guide on submitting a paper tax return, which also details other supplementary pages you might need.   

Below you'll find a handy checklist of everything you'll need before filling out a paper tax return.

 

 

Self-employed tax return – online returns

If you submit online, HMRC must receive your tax return before midnight on 31 January - so, for the 2017/2018 tax year, the deadline for online submissions is 31 January 2019.

If you submit an online tax return, you can select the pages you need as you complete it. To make an online tax return, you need to register with HMRC in advance and receive an activation code (Pin) through the post. 

This can take several days, so you must make sure you register in plenty of time before the deadline.

Sole traders and most other self-employed people can submit a self-assessment tax return online without any problem, but a Partnership Tax Return (SA800) can only be sent online in conjunction with specially developed commercial software.

The deadline to submit an online self-assessment tax return for 2017-18 is 31 January 2019.

Use the Which? online tax calculator : our easy-to-use and jargon-free tax calculator offers personalised tax tips, and you can submit the form directly to HMRC.

Self-employed tax record-keeping FAQ

Information you give on your tax return must be based on your accounts and other records of your business dealings.

You should keep records of these documents and show them to HMRC if requested - they could save you from paying a penalty if a discrepancy is spotted.

Check our Q&A below for anything you want to know about self-employment tax and record keeping.

 

Which records should I keep?

 

If you’re a sole trader or partner in a business partnership, you need to keep records of your business income and expenses. 

This includes all sales and income, all business expenses, VAT records, PAYE records. You also need to keep records of your personal income. 

If you’re a limited company, you must keep details about the company itself, financial and accounting records, and details of directors, shareholders and company secretaries and associated promises and transactions.

 

Why do I have to keep these records?

 

While you don’t need to send in these records when you submit your tax return, you’ll need them in order to work out the profit or loss – which must be submitted on your tax return – and to show to HMRC if asked for them. 

HMRC has the powers to visit your premises and inspect your books at any time, so it is vital to keep good records.

 

What sort of proof to I need to keep?

 

You need to be able to back up your records, if asked. 

You should keep and file all receipts for goods and stock, bank statements, chequebook stubs, sales invoices, till rolls and bank slips.

 

What should be included in my records?

 

You need to choose between traditional accounting or cash basis reporting. 

Cash basis reporting is best for incomes of £150,000 or less, only recording income or expenses when you receive money or pay a bill. 

Traditional accounting is recording income and expenses by the date you were invoiced or billed, so you also need to record:

  • What you’re owed but haven’t received yet
  • What you’ve committed to spend but haven’t paid yet
  • The value of stock and work in progress at the end of your accounting period
  • Your year-end bank balances
  • How much you’ve invested in the business during the year
  • How much money you’ve taken out for your own use.

 

How should I keep my records?

 

There are no rules on how to keep your records – they can be on paper, digitally (on a spreadsheet, for example) or with book-keeping software. 

Bear in mind that HMRC can charge a penalty if your records aren’t accurate, complete and readable – so however you record them, it’s worth keeping them as neat as possible.

 

How long should I keep my records for?

 

You must keep these accounts and records for at least five years from 31 January following the relevant tax year, in case HMRC wishes to inspect them and query your return. 

So, for the 2017-18 tax year, this means you must keep records until 31 January 2024. Failure to do this could cost you a £3,000 fine. 

It might be worth keeping records for 20 years, given that this is the time limit for an HMRC investigation if it suspects fraud.

 

What if my records get stolen, lost or destroyed?

 

If your records can’t be replace, you must try to provide figures. 

Tell HMRC when you file your tax return if you’re using estimated figures, or provisional figures – in this case you’ll need to submit actual figures when they are available.