Self-Assessment 2026: The Essential Guide
Everything You Need to Know About the 2025-26 Tax Return, Deadlines, and the Last “Traditional” Self Assessment
The 2025-26 Self Assessment tax return (due 31 January 2027) represents a pivotal moment in UK tax history. For many, it will be the last “traditional” annual tax return before Making Tax Digital for Income Tax changes everything. Understanding the rules, deadlines, and planning opportunities this year is more crucial than ever.
Key Deadlines You Cannot Miss
Missing Self Assessment deadlines triggers automatic penalties. Mark these critical dates in your calendar for the 2025-26 tax year.
| Deadline | What’s Due | Penalty for Missing | Tax Year |
|---|---|---|---|
| 5 October 2026 | Register for Self Assessment if you’re newly self-employed or have new taxable income | Potential £100 penalty | 2025-26 |
| 31 October 2026 | Paper tax return deadline | £100 immediate penalty | 2025-26 |
| 31 January 2027 | Online tax return deadline AND First payment on account for 2026-27 |
£100 penalty + interest on late tax | 2025-26 |
| 31 July 2027 | Second payment on account for 2026-27 | Interest on late payment | 2026-27 |
The initial £100 late filing penalty applies even if you owe no tax or have already paid your tax bill. Additional daily penalties of £10 per day (up to 90 days) apply after 3 months, plus further penalties at 6 and 12 months. Interest accrues on late payments from 1 February 2027.
Income Tax Rates and Allowances 2025-26
| Tax Band | Income Range | Tax Rate | Notes |
|---|---|---|---|
| Personal Allowance | Up to £12,570 | 0% | Reduced by £1 for every £2 over £100,000 |
| Basic Rate | £12,571 – £50,270 | 20% | Applies to England, Wales & Northern Ireland |
| Higher Rate | £50,271 – £125,140 | 40% | Scottish rates differ (see below) |
| Additional Rate | Over £125,140 | 45% | No personal allowance if income >£125,140 |
Tax Calculation Example (2025-26):
A self-employed individual with £65,000 profit:
– Personal Allowance: £12,570 @ 0% = £0
– Basic Rate: £37,700 @ 20% = £7,540
– Higher Rate: £14,730 @ 40% = £5,892
Total Income Tax = £13,432
Plus Class 4 NIC: (£50,270 – £12,570) × 8% + (£65,000 – £50,270) × 2% = £3,337
Total Tax & NIC = £16,769
Scottish Income Tax Rates (2025-26)
| Tax Band | Income Range | Tax Rate | Difference vs Rest of UK |
|---|---|---|---|
| Starter Rate | £12,571 – £14,876 | 19% | 1% lower than basic rate |
| Basic Rate | £14,877 – £26,561 | 20% | Same as rest of UK |
| Intermediate Rate | £26,562 – £43,662 | 21% | 1% higher than basic rate |
| Higher Rate | £43,663 – £125,140 | 42% | 2% higher than rest of UK |
| Top Rate | Over £125,140 | 47% | 2% higher than additional rate |
National Insurance Contributions (NICs)
1 Class 2 NICs (Self-Employed)
Rate: £3.45 per week (voluntary if profits below £6,725)
Threshold: Small Profits Threshold £6,725
Benefit: Contributes toward State Pension and certain benefits
2 Class 4 NICs (Self-Employed)
Lower Profits Limit: £12,570 (0%)
Basic Rate: £12,571 – £50,270 (8%)
Upper Profits Limit: Over £50,270 (2%)
Note: Class 4 NICs don’t provide benefit entitlements
3 Payments on Account
If your tax bill exceeds £1,000 (and less than 80% of tax collected at source), you must make two advance payments:
31 January: 50% of previous year’s tax bill
31 July: Remaining 50%
Any balance settled by following 31 January.
Allowable Expenses and Deductions
- Office Costs: Stationery, phone bills, postage
- Travel: Fuel, parking, train/bus fares, hotel rooms (if necessary)
- Clothing: Uniforms, protective clothing, costumes (for entertainers)
- Staff Costs: Salaries, bonuses, pensions, benefits
- Stock/Materials: Goods bought for resale, raw materials
- Financial Costs: Bank charges, interest on business loans, insurance
- Marketing: Website costs, advertising, directories
- Training: Courses related to your business
For business use of your home, you can either:
Option 1: Calculate actual costs (portion of rent, utilities, council tax)
Option 2: Use flat rates: £10/month for 25-50 hours, £18/month for 51-100 hours, £26/month for 101+ hours
For vehicles, use simplified mileage: 45p per mile for first 10,000 miles, 25p thereafter (cars/vans).
Special Considerations for 2025-26
| Area | 2024-25 | 2025-26 Changes | Action Required |
|---|---|---|---|
| Dividend Allowance | £500 | £500 (frozen) | Plan dividend timing if close to threshold |
| Capital Gains Tax Allowance | £3,000 | £3,000 (frozen) | Consider spreading asset sales across tax years |
| Pension Annual Allowance | £60,000 | £60,000 (no change) | Maximise contributions to reduce taxable income |
| MTD for Income Tax | Voluntary | Mandatory from April 2026 if income >£50k | Begin digital record-keeping NOW |
Common Mistakes to Avoid
- Missing the Registration Deadline: If you need to complete a return and haven’t registered by 5 October, you’re already facing potential penalties.
- Incorrect Payments on Account: Forgetting that your January payment includes both your tax bill AND your first payment on account.
- Not Claiming All Expenses: Overlooking legitimate business expenses like home office use, mileage, or use of personal assets.
- Mixing Personal and Business: Using a personal bank account for business transactions makes record-keeping much harder.
- Leaving it Until January: The Christmas/New Year period is the worst time to tackle your tax return. Start in November at the latest.
The MTD Transition: Last “Traditional” Return?
For taxpayers with business/property income over £50,000, the 2025-26 return (filed by 31 January 2027) will be the last traditional Self Assessment. From April 2026, you’ll need to comply with Making Tax Digital for Income Tax.
2025-26 Tax Year
Traditional Self Assessment
(6 Apr 2025 – 5 Apr 2026)
April 2026
MTD for ITSA begins
(Income >£50k must register)
31 Jan 2027
Last traditional SA deadline
First MTD quarterly update due
Tax Planning Strategies for 2025-26
- Pension Contributions: Maximise pension payments to reduce taxable income
- Capital Expenditure: Consider timing of equipment purchases to maximise Annual Investment Allowance
- Income Timing: If possible, delay invoicing to push income into next tax year
- Expense Timing: Bring forward business expenses where beneficial
- Marriage Allowance: Transfer up to £1,260 of personal allowance to spouse if eligible
- Charitable Giving: Gift Aid donations increase basic rate band
Pension Contribution Example:
Higher rate taxpayer with £60,000 income:
£10,000 pension contribution costs just £6,000 after tax relief:
– Basic rate relief claimed by pension provider: £2,000
– Higher rate relief via tax return: £2,000
Net cost = £6,000 for £10,000 pension
Record Keeping Requirements
1 What to Keep
All records supporting your tax return for at least 5 years after 31 January deadline:
• Sales invoices
• Purchase receipts
• Bank statements
• Mileage records
• Home office calculations
2 Digital Transition
Even if not yet in MTD, start keeping digital records now. Use apps to photograph receipts, cloud accounting software, or digital spreadsheets. This makes the 2026 MTD transition much smoother.
3 HMRC Enquiries
HMRC can enquire into your return up to 12 months after submission (longer if suspected fraud). Good records are your best defence. Consider using software that creates an audit trail.
Your Self Assessment Timeline
April 2025
Tax year begins
Start organised record-keeping
Oct 2026
Register if new to SA
Consider paper return deadline
Nov-Dec 2026
Gather records
Prepare return draft
Jan 2027
Finalise & submit online
Pay tax & 1st POA
31 January is the busiest day for HMRC’s online services. System crashes and delays are common. Submit by mid-January at the latest. Payments take 3-5 working days to clear—don’t leave payment until 31 January!
Navigate Your Final “Traditional” Return with Confidence
The 2025-26 Self Assessment is more than just another tax return—it’s your bridge to the digital tax future. Our specialists can ensure you maximise deductions, meet all deadlines, and prepare properly for MTD while minimising your tax liability through strategic planning.
Get Self Assessment Support & MTD Planning
