Your Self-Assessment Tax Return Guide

Self-Assessment is one of those parts of money admin that many people put off. Not because it’s impossible, but because it feels unclear. Knowing what you need to report, when to file, and how to avoid mistakes can make a real difference.

This applies whether you’re self-employed, running a side hustle, earning rental income, or managing a more complex setup.

In this episode of The Wallet Podcast, Emilie Bellet speaks with Maike Currie, VP of Personal Finance at PensionBee, about what actually matters when it comes to Self Assessment. This guide summarises the key takeaways as the 31 January 2026 deadline approaches.

This episode is for general information only and does not constitute personal tax or financial advice.

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Who needs to complete a Self Assessment tax return?

You generally need to file a Self Assessment tax return if you have income that is not fully taxed at source. This can include:

• Self-employment or freelance income

• Side hustles or casual trading above the trading allowance

• Rental income, including overseas property

• Dividend income above the dividend allowance

• Foreign income

• More complex arrangements, such as multiple income streams.

A common misconception is that once you file a return, you must do so every year. In practice, you only need to file in years when your circumstances require it. If your situation changes, you can ask HMRC to stop issuing returns.

Common myths that cause confusion

Many people over- or under-report because of assumptions rather than clear guidance. Maike highlights several areas that frequently cause confusion:

• Side hustles and casual selling
  Not all additional income automatically requires a return. Once allowances are exceeded, or there is a clear intention to make a profit, reporting may be required.

• Multiple jobs
  PAYE does not always capture everything correctly if you have more than one employer.

• Crypto, platforms, and online income
  Income from international platforms such as Etsy, Fiverr, or Patreon still needs to be reported.

• Rent-a-Room versus property income
  These are treated differently for tax purposes and are often misunderstood.

Key deadlines to know

Missing deadlines is one of the most common mistakes.

• You must tell HMRC by 5 October if you need to complete a tax return for the previous year

• Paper filing has an earlier deadline than online filing: HMRC must receive your paper tax return by 11:59pm on 31 October 2025 or you’ll get a late filing penalty.    

• Online filing deadline: 31 January 2026

• Payment deadline: 31 January 2026

• Payments on account are often due in January and July.

You don’t need to wait until January to file. Filing earlier can give you clarity on what you owe and time to plan.

Why so many people leave it until January

For many, the barrier is not technical. It’s psychological.

Self-Assessment can feel overwhelming, particularly if finances have been irregular. Maike suggests breaking the process down:

• Gather documents early

• Set aside a short admin window

• Tackle the return in stages.

Avoiding it doesn’t make it easier. It usually adds pressure later.

What happens after you file?

Once your return is submitted:

• HMRC calculates your tax bill

• You may need to make a lump-sum payment or payments on account

• If you cannot pay in full, contact HMRC as soon as possible to discuss options.

If the amount comes as a surprise, the first step is to review the figures and understand what’s driving the bill.

How pensions can reduce your tax bill

Pension contributions are one of the most effective but least understood tools in tax planning.

• Contributions can reduce your taxable income

• Higher-rate taxpayers can claim additional tax relief

• In some cases, you can still top up late in the tax year.

Maike explains how pension contributions can support both short-term tax planning and long-term financial security.

Maike also highlights why this matters so much in practice, particularly for women. She explains that by their 50s, women hold on average around £100,000 less in their pension pots than men, and that career breaks, more than the gender pay gap alone, are the biggest driver of this difference. Taking time out of paid work without continuing pension contributions can create a gap that is difficult to close later.

Traps for higher earners

For those earning above certain thresholds, several rules commonly catch people out:

• The £100,000 income threshold, where personal allowance is gradually withdrawn

• The High Income Child Benefit Charge

• Frozen tax thresholds, which increase effective tax over time.

Maike describes this as a form of “stealth tax.” Because thresholds are frozen, more people are gradually being pulled into higher tax bands even when their real spending power has not increased. She notes that the share of higher-rate taxpayers is rising from around one in five towards one in four, making Self Assessment and proactive planning relevant for a much wider group than in the past.

What counts as reportable income (and what does not)

Reportable income can include:

• Dividends

• Property income

• Foreign income

• Benefits in kind

• Earnings from online platforms.

Knowing what doesn’t need to be reported matters too. Over-reporting can be just as problematic as under-reporting.

What if your income drops?

If your income changes significantly, you may be able to adjust payments on account. Many people continue paying based on previous years without realising they can update their figures.

Making Tax Digital: what changes in 2026?

From April 2026, Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) will apply to some taxpayers.

In practice, this means:

• More frequent digital reporting

• Quarterly updates instead of one annual return

• Less reliance on paper-based processes.

Maike explains who will be affected first and how to prepare without overcomplicating things.

Quick-fire takeaways

• One thing to do now: Start early. Even gathering documents reduces the mental load.

• One pension myth: Pensions are not only for later life. They are also a practical tax tool

• One habit that helps: Regular money check-ins make future returns easier.

Final thoughts

Self-Assessment doesn’t need to dominate your January (or your mind!). With clearer information and a few simple habits, it becomes a manageable part of your financial life.

If you’re looking for more structure and support to feel confident with your money, this is exactly the kind of guidance we focus on inside the Vestpod community.

Resources

Check official Self Assessment guidance on the HMRC website: https://www.gov.uk/browse/tax/self-assessment 

This article is for general information only and does not constitute personal tax or financial advice. Tax rules can change. If you are unsure about your situation, please check HMRC guidance or speak to a qualified adviser.

Partner

Thank you to our partner PensionBee. With PensionBee, you can combine your old pensions, add money when it suits you, and make withdrawals (from age 55, rising to 57 from 2028). It’s a straightforward way to take control of your retirement savings and join a community of over 300k customers. 

Its monthly podcast, The Pension Confident Podcast, aims to help listeners better understand the world of personal finance and pensions. Listen or watch the full episodes on YouTube. And if you’re already a PensionBee customer, you can listen in the PensionBee app!

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