Submitting your tax return

Once you are self-employed you have to file a tax return covering your income for the tax year ended 5 April.

This tax return will include your taxable business profits (see below).

Each year’s tax return needs to be submitted by the following 31 October if you are submitting it by paper copy or by the following 31 January if you are filing on-line.

So for example your 2024 Tax Return will cover your income from 6 April 2023 to 5 April 2024. This needs to be submitted by 31 October 2024 if it is a paper return or 31 January 2025 if you are filing online.

If we are completing your tax returns for you, we will make sure that these are completed to meet all relevant deadlines.

Estimating your tax payable

If you'd like an estimate of your tax payable on your sole trader earnings for the 2023/24 tax year you can use the template here (please note you can also use this template for your partnership earnings).

If you'd like an estimate of your tax payable on your sole trader earnings for the 2022/23 tax year you can use the template here (please note you can also use this template for your partnership earnings).

If you'd like an estimate of your tax payable on your sole trader earnings for the 2021/22 tax year you can use the template here (please note you can also use this template for your partnership earnings).

However please note that this is only an estimate and does not take account of any other taxable income which you might have.

Paying your tax

Payments on account of income tax and Class 4 National Insurance are normally due on 31 January and 31 July each year. 

Each payment is one-half of your total estimated tax liability for the current tax year (less any tax paid at source eg on bank interest). 

So, let’s assume that you have been trading a number of years.  The payments you make on account on 31 January 2025 and 31 July 2025 (for your 2024/25 tax liability) will be based on your tax liability for the year to 5 April 2024 (2023/24).

If you have either under-paid or over-paid your 2023/24 tax and Class 4 NI, then this will be adjusted for in your 31 January 2026 tax payment.

Let’s look at an example:

Let’s assume you had made payments on account of your 2024/25 tax bill of £4,000 but your actual tax bill turns out to be £4,500. 

On 31 January 2026 you will make a payment of £2,750:

This is £500 additional tax for 2024/25 (you paid £4,000 but your actual bill is £4,500)

plus

£2,250 payment on account for tax year 2025/26 (half of your actual 2024/25 tax liability of £4,500 which forms the basis of your initial 2024/25 tax payments on account).

On 31 July 2026 you will make a second payment on account of £2,250 (half of your actual 2024/25 tax bill).

When your final 2025/26 tax bill is calculated, you may have an under/over payment which will be adjusted in the payment collected on 31 January 2027.

In summary, if you were filing a 2025 Tax Return you would pay the balance of any 2024/25 tax and Class 4 National Insurance due on 31 January 2026 and your first 2025/26 payment on account (based on one half of your 2024/25 tax liability) at the same time.

Your second 2025/26 payment on account would be payable on the 31 July 2026 and the balance of any 2025/26 tax would be payable on 31 January 2027 and so on.

Because this estimate is based on your previous year’s taxable income, it is important to understand whether your current year’s taxable profits are increasing or decreasing.  If they are decreasing, it may be worth reducing your payments on account as you may end up paying too much tax unnecessarily. 

However, beware – if you reduce your payments on account and the final tax liability turns out to be higher than previously thought, HMRC will charge you interest on the additional tax which should have been paid on time.  HMRC’s interest rates are quite high and this could cost you a pretty penny!

The balance of any tax due for the current year must also be paid by 28 February following the tax year concerned otherwise you will incur a 5% penalty on any tax for this year which is still outstanding.