Part of our complete guide to Self Assessment.
The short answer
Self assessment isn't just for the self-employed. HMRC expects a tax return from anyone whose tax situation isn't fully settled by PAYE, and that catches far more people than most expect, directors, landlords, side-hustlers, and higher earners among them. If none of the situations below apply to you, you almost certainly don't need to file. If even one does, you likely do.
You must file if you are...
- Self-employed or a sole trader with income over £1,000 a year (before expenses), including freelance and contract work
- A partner in a business partnership
- A company director who receives dividends above the dividend allowance, or whose income isn't fully taxed through PAYE
- A landlord with rental income over £1,000 a year, see our note on landlord tax
- Earning over £150,000 from any source, even if it's all taxed through PAYE
- Receiving the High Income Child Benefit Charge because you or your partner earn over £60,000 and the household claims Child Benefit, use our HICBC calculator to check
- Claiming certain reliefs such as higher-rate pension relief not already given through your pay, or claiming the Marriage Allowance in some circumstances
- Earning untaxed income from tips, commission, foreign income, or savings and investment income above your allowances
- Selling assets and owing Capital Gains Tax, for example on a rental property or a large share disposal
- Specifically asked to file by HMRC, even if none of the above technically applies, if you've received a notice to file, you must respond to it or formally ask HMRC to withdraw it
Key point: It's your responsibility to tell HMRC you need to file, not theirs to ask. "I didn't get a letter" is not a defence against the registration or filing deadline.
You probably don't need to file if you...
- Are employed only, with all your income taxed correctly through PAYE, and no other income sources
- Have casual or side income under the £1,000 trading allowance
- Have savings interest or dividend income that falls fully within your tax-free allowances
If you're not sure which camp you fall into, it's worth a two-minute check rather than guessing, the cost of being wrong (a missed deadline, a penalty) is far higher than the cost of asking.
The situations people most often miss
A handful of scenarios regularly catch people out because they don't feel like "self-employment":
- A single big eBay, Vinted, Etsy or marketplace clear-out or side income that tips over £1,000, see our note on hobby vs trading on Etsy
- Renting out a room or a property occasionally, even through a platform like Airbnb
- Crossing into HICBC territory after a pay rise or bonus, without realising Child Benefit is still being claimed at home
- Directors who take a small salary and dividends, assuming the company "sorts out" their personal tax (it doesn't, dividends are reported on your personal return)
What to do next
If you think you need to file for the first time, the next step is registering with HMRC and getting a Unique Taxpayer Reference (UTR), not jumping straight to the return itself. Our guide on your first self assessment and our walkthrough on how to register for self assessment cover exactly what to do and by when.
Not sure where you stand? Book a free consultation and we'll tell you plainly whether you need to file, and if so, what's involved.
Frequently asked questions
Do I need to file a tax return if I'm employed and pay tax through PAYE?
Not usually, PAYE already collects the tax on your employment income. You only need to file if you also have another reason on this list, such as self-employment income, rental income, or a high income with child benefit.
What if my side income is under £1,000?
The trading allowance means you don't need to register or file if your gross self-employment or casual income is below £1,000 a year, before expenses. Above that, HMRC generally expects a return.
I'm a company director, do I automatically need to file?
Not automatically, but most directors end up needing to because they take dividends, which must be declared above the dividend allowance, or because HMRC has specifically asked them to register.
What happens if I don't realise I needed to file?
HMRC can still charge penalties and interest even if you genuinely didn't know. Register and file as soon as you realise, the earlier you act, the smaller the penalty is likely to be.