Self Assessment for the First Time: What to Expect and How to Prepare

Your first Self Assessment tax return is a milestone. It feels significant because it is — you are managing your own tax for the first time. But it does not need to be stressful. Here is exactly what to expect and how to prepare.

Step 1: Register with HMRC

Before you can file a return, you need to register for Self Assessment. Do this as soon as you start self-employment — the deadline is 5 October following the end of the tax year you need to file for.

Registration is done online through GOV.UK:

1. Create a Government Gateway account (if you do not have one)
2. Register for Self Assessment as self-employed
3. Wait for your Unique Taxpayer Reference (UTR) — this arrives by post within 10 working days
4. Once you have your UTR, you can enrol for the Self Assessment online service

Step 2: Keep Records from Day One

Start recording your business income and expenses from the moment you begin trading. You will need these records to complete your return.

At minimum, keep:

• A record of every business sale or payment received
• Receipts and records for every business expense
• Bank statements for your business account
• Invoices you have sent
• Mileage logs if you claim vehicle costs

Using software from the start makes this much easier. Accounted tracks everything automatically through bank feeds, so you do not need to build a record-keeping system from scratch.

Step 3: Understand Your Tax Year

The UK tax year runs from 6 April to 5 April. Your first Self Assessment return covers the period from when you started trading to the end of the tax year (5 April).

If you started freelancing in September 2026, your first return covers September 2026 to April 2027, filed by 31 January 2028.

Step 4: Know Your Deadlines

| What | When | |------|------| | Register for Self Assessment | By 5 October after the tax year ends | | Paper return (if eligible) | By 31 October after the tax year ends | | Online return | By 31 January after the tax year ends | | Pay your tax | By 31 January after the tax year ends |

Miss the 31 January deadline and you face an automatic £100 penalty — even if you owe nothing.

Step 5: Calculate Your Profit

Your taxable profit is your total business income minus your allowable expenses:

Income — everything your business earned during the tax year Minus expenses — all legitimate business costs Equals profit — this is what you pay tax on

If you use cash basis (the default for most sole traders), record income when you receive it and expenses when you pay them.

Step 6: Complete Your Return

Your Self Assessment return has several sections:

• Personal details — name, address, UTR, NI number
• Self-employment pages — your business income, expenses, and profit
• Additional income — any employment, rental, savings, or investment income
• Tax reliefs — pension contributions, Gift Aid, etc.
• Student loan — repayment details if applicable

HMRC's online system calculates your tax automatically based on the figures you enter. Review the calculation before submitting.

Step 7: Pay Your Tax

Once your return is submitted, you need to pay any tax owed by 31 January. Payment methods include:

• Direct bank transfer (fastest)
• Debit card online
• Direct debit
• Budget payment plan (pay monthly throughout the year)

What First-Timers Often Get Wrong

Forgetting payments on account. If your tax bill is over £1,000, HMRC will ask you to make advance payments towards next year's tax. This means your first January payment may be 150% of what you expected.

Not claiming enough expenses. First-time filers are often too conservative with expenses. If it is a genuine business cost, claim it.

Missing the registration deadline. If you register late, you may face a penalty. Register as soon as you start trading.

Not putting money aside. A good rule of thumb is to save 30% of your profit for tax. Accounted shows you a real-time tax estimate so you know exactly how much to set aside.

The Payments on Account Shock

This catches more first-time filers than anything else. If your tax bill is £3,000, you do not just pay £3,000 in January. You pay:

• £3,000 (your tax for the year just ended)
• Plus £1,500 (first payment on account for next year)
• Total January bill: £4,500

Then another £1,500 in July (second payment on account). Budget for this from the start.

Getting Help

If you feel overwhelmed, you have options:

• Software like Accounted handles the calculations and filing for you
• An accountant can prepare and file your return
• HMRC helpline can answer specific questions about your return
• GOV.UK has detailed guidance on every section of the return

Your first return is the hardest because everything is new. By your second year, you will know the process and it becomes routine.

Penny, our AI bookkeeper, categorises your expenses automatically and flags anything that looks wrong. Try it free for 14 days.