A practical guide for sole traders, landlords and anyone with untaxed income.
Starting a new business, becoming a landlord or earning money outside your usual employment can be exciting. It can also bring new tax responsibilities, including the need to register for self-assessment.
If tax is not automatically deducted from all of your income, HMRC may need you to report that income through a self-assessment tax return. Understanding when you need to register can help you avoid missed deadlines, unexpected tax bills and unnecessary stress.
What Is self-assessment?
Self-assessment is the system HM Revenue and Customs (HMRC) uses to collect Income Tax from people whose tax is not fully dealt with automatically through PAYE.
If you need to complete a self-assessment tax return, you report your relevant income, expenses and other information to HMRC after the end of the tax year. HMRC then uses the information to work out the tax you owe.
For many people starting a new venture, registering for self-assessment is one of the first important tax administration steps.
Who Needs to Register for self-assessment?
There are several reasons you may need to register. Some of the most common are becoming self-employed, receiving rental income or having other income that has not already been taxed.
You've Become Self-Employed
If you've started working for yourself as a sole trader, you generally need to register as a sole trader for self-assessment if your gross trading income is more than £1,000 in a tax year.
The £1,000 figure is based on income before deducting business expenses. This means it is your turnover that matters when considering this threshold, not simply the profit you have left after costs.
You may also need or choose to register in some other circumstances, such as if you need to prove you are self-employed or want to make certain voluntary National Insurance contributions.
If you've recently launched a new business, started freelancing or turned a side project into a source of income, don't assume HMRC will automatically know. It is important to check whether you need to register.
You've Started Receiving Rental Income
Becoming a landlord can also create a self-assessment requirement.
There is a £1,000 property allowance for income from property. Above this level, what you need to do depends on the amount of rental income and your circumstances. In some cases HMRC may be able to collect tax without a tax return, while higher levels of rental income must be reported through self-assessment.
If you do not normally complete a tax return and need to report rental income through self-assessment, you will need to register with HMRC.
This can apply whether you've purchased a buy-to-let property, started renting out an existing property or begun receiving income from land.
You Have Other Untaxed Income
You may also need to complete a self-assessment tax return if you receive income where tax has not already been collected.
Examples can include:
Tips or commission.
Savings interest.
Dividend income.
Foreign income.
Certain trust or settlement income.
Other taxable income that cannot be collected through your PAYE tax code.
Not every additional source of income automatically means you need to complete a tax return, so it is worth checking your individual circumstances rather than making assumptions.
Other Reasons You May Need a Tax Return
Self-assessment is not only for sole traders and landlords. You may also need to send a return if, for example, you are a partner in a business partnership, need to report certain capital gains, or need to pay the High Income Child Benefit Charge and it is not being collected through PAYE.
If HMRC sends you a notice asking you to complete a tax return, you must also respond and submit the return by the relevant deadline.
When Do You Need to Register?
For the 2025/26 tax year, which ran from 6th April 2025 to 5th April 2026, you generally need to tell HMRC by 5th October 2026 if you need to complete a tax return and either have not sent one before or were previously registered but did not need to send one for the 2024/25 tax year.
For example, if you became self-employed or started receiving taxable rental income during the 2025/26 tax year and now need to file a return, 5th October 2026 is an important date to have in your diary.
Registering late can lead to problems and, in some circumstances, penalties, so it is better to deal with it sooner rather than waiting until the January filing deadline.
What Happens After You Register?
Once you're registered, HMRC will provide the details you need to manage your self-assessment obligations, including your Unique Taxpayer Reference (UTR).
You'll then need to keep suitable records so that your tax return can be completed accurately.
Depending on your circumstances, these could include:
Sales invoices and records of business income.
Receipts and records of allowable business expenses.
Rental income and property expense records.
Bank statements.
Details of savings, dividends or other taxable income.
Information relating to any relevant capital gains.
Good record keeping from the beginning can make completing your tax return much easier and gives you a clearer picture of your finances throughout the year.
What Are the Key self-assessment Deadlines?
For the 2025/26 tax year, the main deadlines are:
5th October 2026: tell HMRC if you need to complete a tax return and meet the registration conditions.
31st October 2026: deadline for HMRC to receive most paper tax returns.
31st January 2027: deadline for most online tax returns and for paying the self-assessment tax due
If Payments on Account apply to you, there may also be a further payment due on 31st July.
Why Registering Early Can Make Life Easier
It can be tempting to put tax administration to one side when you're busy getting a new business or property venture off the ground. However, dealing with self-assessment early can make things much more manageable.
Registering and keeping good records from the start can help you:
Understand what information you need to keep.
Plan ahead for your tax bill.
Avoid rushing close to the filing deadline.
Reduce the risk of missing income or allowable expenses.
Give your accountant the information they need to advise you properly.
You can submit your tax return after the tax year ends rather than waiting until January. Filing earlier can give you more time to understand what you owe and budget for the payment.
Starting a New Venture? Build Tax Into Your Plans
If you're starting a business, taking on freelance work or becoming a landlord, tax should be part of your planning from the beginning.
Simple habits such as keeping business and personal transactions organised, saving receipts and putting money aside for tax can make a significant difference later.
It is also worth remembering that your responsibilities can change as your income grows. What starts as a small side income may develop into a business that requires more detailed reporting, so regular reviews are useful.
Not Sure Whether You Need to Register?
Self-assessment can feel confusing when your circumstances have recently changed, particularly if you've always had your tax dealt with automatically through PAYE.
At Hammond-Barr, we keep things straightforward. We'll look at your circumstances, explain whether you need to register, help you understand the deadlines and make sure you know what records to keep.
Whether you've become self-employed, started receiving rental income or have another source of untaxed income, getting the right advice early can save time and worry later.
If you're unsure whether you need to register for self-assessment, get in touch with the Hammond-Barr team.
We're here to help you understand what you need to do and keep your tax affairs on track.
Please note: With effect from 6 April 2027, MTD ITSA will apply to all sole traders or landlords whose income exceeds £30,000. Please contact us if you wish to receive further advice.
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