The 2025/26 tax year brings a chance for individuals and business owners to review their self assessment approach. We have seen many questions about what counts as taxable income, which expenses are allowable, and how to avoid late penalties.
In this blog, we will break these points down in a straightforward way. We aim to help you gain clarity on the key deadlines, reporting requirements, and record-keeping techniques that will lead to a smooth submission. We will also highlight a few lessons learned from earlier years that will support your process for the next filing cycle.
Key deadlines for self assessment
The standard timeline for self assessment remains unchanged. For those filing a paper return, the deadline is 31 October 2025. For those filing online, the cut-off date is 31 January 2026. You must also ensure that you pay any tax owed by 31 January 2026. These deadlines are firm, and missing them can lead to penalties. HM Revenue & Customs (HMRC) typically issues automatic late filing fines starting at £100, which then increase the longer the return remains outstanding.
If you had to submit a tax return last year, you will usually receive a notification from HMRC. If you are unsure, you can visit HMRC’s official self assessment page to check whether you fall under the requirement. You can also contact Companies House for further guidance if you are registered as a limited company, although limited companies typically deal with corporation tax rather than a personal self assessment return.
What income to report
For the 2025/26 tax year, you must declare:
- employment income
• self-employment or freelance income
• rental income from property
• overseas income, if you are a UK resident for tax purposes
• dividend income
• interest from savings
• capital gains from the sale of certain assets.
The personal allowance for 2025/26 stands at £12,570, which is the amount you can earn before paying income tax. Any income above this threshold is taxed at the applicable rates. Based on current legislation, the basic rate of 20% applies up to £50,270, the higher rate of 40% applies from £50,271 to £125,140, and any amount above £125,140 is taxed at 45%. These thresholds remain subject to change, but they have been frozen until at least 2026.
Allowable deductions and reliefs
Allowable deductions reduce your taxable income. Common items include the following.
- Business expenses: If you are self-employed, you can claim expenses such as office costs, travel, stock, marketing and professional fees that relate directly to your business.
• Charitable donations: Gift Aid contributions to registered charities can reduce your tax bill.
• Pension contributions: Payments to approved pension schemes attract tax relief.
• Certain investment schemes: Venture capital trusts (VCT) and Enterprise Investment Schemes (EIS) offer tax relief if you have invested in them.
You must keep thorough records of any expenses you claim. If HMRC opens an inquiry, it will ask to see invoices, receipts or other documentation that confirms that each expense was genuinely business-related.
Common mistakes to avoid
A few errors often come up with self assessment returns, including the following.
- Mixing personal and business costs: For instance, you cannot claim personal travel as a business expense.
• Forgetting to declare all sources of income: Even small or occasional freelance jobs must be included.
• Inaccurate record-keeping: Missing receipts and incomplete logs can lead to discrepancies.
• Overlooking changes in income: If you started or stopped a job partway through the tax year, you might need to adjust your calculations.
We recommend that you set aside time to check every entry you make. That way, you reduce the risk of penalties or follow-up questions from HMRC.
Lessons learned from previous years
Many of our clients at Fairman Keable found that sorting records throughout the year was the best way to avoid the typical last-minute scramble. By maintaining a monthly or quarterly schedule of data entry, you can reduce the workload in the final weeks before the deadline. Here are some other tips.
- Avoid guesswork. If a figure is uncertain, try to find the correct document or contact a professional for support.
• Maintain separate accounts for business income and expenses to track cashflow easily.
• Submit returns well before the January rush. HMRC’s online system can slow down if too many people file at once.
• Include a safety margin in your savings. If your tax bill ends up higher than expected, you will have enough funds set aside.
Gathering records and preparing to file
We encourage taxpayers to compile their records soon after the tax year ends on 5 April. That includes:
- bank statements
• invoices for services provided
• utility bills for business premises
• receipts for professional services
• P60 and P45 forms (if you are employed)
• dividend vouchers (if you receive dividends).
This paperwork forms the foundation for your return. If you work with an accountant, it is helpful to provide these records in an organised format. We often use cloud-based systems to help our clients streamline their data entry. That kind of technology significantly reduces errors and allows for timely updates whenever new information becomes available.
Using HMRC’s online system
HMRC’s online platform is designed to walk you through each section of the self assessment. If you have not used it before, you will need to create a Government Gateway account, which requires proof of identity. This step can take a few days, so it is best to register well before the deadline. Once registered, you can save a draft of your return, which is handy if you prefer to enter information in small steps rather than all at once.
With HMRC’s system, you get an estimate of your tax liability once you have entered your figures. You can then either pay immediately or wait until closer to the 31 January deadline, but it is important to note that interest may accrue if you pay after the due date.
Benefits of filing early
Many people leave their returns until the final week of January. This approach – where a flurry of activity often occurs – can be quite stressful. By filing early, you can spread any payments out over a longer period and potentially budget better for your finances. You also have more time to resolve any issues, such as discrepancies in your income records.
Filing early does not mean you have to pay your tax bill immediately. You are free to file in the spring or summer and then make your payment any time before the 31 January deadline. This strategy offers peace of mind, especially if you are balancing work commitments in January. In addition, earlier submission can reduce the chance of computational errors as you will have the bandwidth to double-check everything thoroughly.
How we can help
We at Fairman Keable believe in breaking tax matters down to their simplest form. Our service focuses on clarity, and we work closely with clients to ensure they understand each line of their return. By drawing on first-principle thinking, we use transparent methods to highlight what is owed and why. You can explore our website to find detailed information on how we handle self-employed and limited company accounts.
If you feel that preparing your return is taking too much time, or you want an expert to check your figures, we are here to help. Our approach is to work collaboratively, so you feel informed about every step. We also provide forward-looking advice to help you stay on track for the next tax year.
Would you like to reduce the stress of your self assessment process and file with complete confidence? Please get in touch with us now so we can support you every step of the way.