If you're a sole trader in the UK, filing a Self Assessment tax return is one of your key responsibilities. While the process may sound intimidating, it doesn’t have to be. With the right guidance and preparation, it can be straightforward — and even save you money.

In this guide, we’ll explain what Self Assessment is, who needs to file it, how to do it properly, and tips to avoid common mistakes.

✅ What Is Self Assessment?

Self Assessment is the system HMRC (His Majesty’s Revenue and Customs) uses to collect Income Tax from self-employed individuals and others whose tax isn’t automatically deducted.

If you earn income outside of traditional employment — like running your own business, freelancing, renting out property, or earning dividends — you likely need to complete a Self Assessment tax return.

You’ll need to file a Self Assessment if you:

• Are a sole trader earning more than £1,000 in a tax year
• Are a partner in a business partnership
• Have income from rental properties, savings, investments, or overseas sources
• Claim certain tax reliefs or child benefits

✅ How and When to File

Filing your Self Assessment involves reporting your income, expenses, and other financial details for the previous tax year (6 April to 5 April). Here’s how to stay on track:

Key deadlines to remember:

• 5 October: Register for Self Assessment if it's your first time
• 31 October: Paper tax return deadline
• 31 January: Online tax return deadline and payment due

Steps to file:

1. Register with HMRC (if you haven’t already)
2. Keep accurate records of your income and business expenses
3. Log into your HMRC account and complete your online return
4. Pay the tax you owe by 31 January

It’s essential to keep receipts, invoices, bank statements, and records of any allowable business expenses — these help reduce your tax bill legally.

✅ Common Deductions and Mistakes to Avoid

One of the biggest benefits of doing your tax return properly is making sure you claim all your allowable expenses. As a sole trader, these can include:

• Office/studio rent
• Mobile phone and internet costs
• Travel and mileage
• Equipment and software
• Marketing and advertising
• Accountancy fees

Common mistakes to avoid:

• Missing the filing deadline (automatic £100 penalty)
• Not registering with HMRC in time
• Forgetting to include other income (like rental or dividends)
• Guessing expenses or not keeping proper records
• Not budgeting for your tax bill throughout the year

Many sole traders also forget about Payments on Account — advance payments for the next tax year’s bill, due in two parts: 31 January and 31 July. This can cause cash flow issues if not planned properly.

✅ Should You Use an Accountant?

While it’s possible to do it yourself, many sole traders hire an accountant to save time and ensure accuracy. A professional accountant will:

• Ensure you’re fully compliant with HMRC
• Help you claim all the tax reliefs you’re entitled to
• Advise on payments on account and reduce overpayments
• Save you hours of admin and reduce the risk of penalties
• 
  

Think of it as a business investment — freeing you to focus on running your business while ensuring your finances are handled properly.

Final Thoughts

Filing your Self Assessment tax return is a legal requirement — but it’s also a valuable opportunity to understand your finances better and save money through smart tax planning.

Whether you’re just starting out or have years of experience, getting it right matters. Avoid the January panic and take control of your finances today.

Need help with your Self Assessment?

At East London Accountants, we specialise in helping sole traders file accurate and stress-free tax returns. Let us take care of the paperwork — so you can focus on growing your business.

👉 Contact us now for a free consultation and peace of mind.