This content was reviewed on 6 Feb 2024.
Running your own business means you get to do what you’re passionate about every day, but for most people, the thought of finances and filling out tax paperwork fills them with dread. If you’re new to self-employment or want to make the process less daunting, FSB Tax Investigation Protection are here to help.
1. Don’t miss the deadline
Whether you’re self-employed full-time or freelancing on the side, you’ll need to fill out a tax return every year. The most important thing to remember when filing a self-assessment tax return is the deadline, which is:
- 31 October following the end of the tax year for a paper return.
- 31 January following the end of the tax year for an online return.
If you don't meet the deadline, you may face a fine from HMRC, so don’t leave it until the last minute. You’re also more likely to make mistakes or miss out important information.
Download our free guide to small business taxes which contains key dates for your diary and guidance on what taxes and paperwork you can expect to pay if you’re a sole trader, partnership, or limited company.
2. File online
If you don't already, or it’s your first time filing a self-assessment return, you can register to file online. The deadline for registering for the first time is 5 October following the tax year. This makes it easier to upload all the information that HMRC needs from This makes it easier to upload all the information that HMRC needs from you. If you’re busy, you don't need to do it all in one go – simply save your form and fill it in when you have time.
You can register to file your self-assessment tax return online here.
3. Track your income and expenses as you go
Keep accurate records of income and what you've claimed as business expenses throughout the tax year so that you’re ready to go, and make sure you declare everything. You can do this with a spreadsheet or online accounting software. For example, you may have records of:
- Bank statements
- Chequebooks and paying in slips
- Credit card statements
- Sales invoices/till rolls
- Job quotes or estimates
- Purchase invoices and expense receipts
- Payroll records
- VAT records
This is not an exhaustive list as each business may need to keep additional records. Also, don’t forget that this information will help you complete the self-employment pages, but if you have other non-business sources of income or gains, these too may need to be declared on your tax return and you should have all the necessary records to evidence the income and expenditure for these sources of income as well.
You can check on the government website if you're not sure whether something can be claimed as a business expense if you’re self-employed.
You don't need to provide receipts to HMRC at this stage, however you should keep record of this for six years because these can be requested by HMRC in the event of an enquiry. Read our guide to HMRC enquiries to learn more about what happens during an investigation.
4. Start early
You don't need to wait until 31 January to make your online return. When the tax year has finished on 5 April, you can start making your preparations and getting organised. If you’ve been collecting all the information you need as you go throughout the year, and have stayed on top of your bookkeeping, you’ll save valuable time when it comes to filling in your tax return. Plus, if you do need to get in touch with HMRC, you’ll avoid the rush.
5. Get organised
Ready to start filling in the boxes? Gather all the paperwork and details that you will need ahead of time:
- Unique Taxpayer Reference (UTR) number (you need to register for one if you’ve not completed a self-assessment before).
- National Insurance number.
- Details of your all your income; for example if you also have rental income or have earned bank/building society interest or have received dividend payments.
- Records of relevant business expenses.
- If you're picking up freelance projects on the side and you’re employed, you'll also need your P60.
6. Budget in advance
Once you’ve submitted your return, you can manage any surprises with your tax bill by budgeting in advance for what you anticipate your tax bill will be and getting ahead if you need to make any payments on account. Set aside a portion of your income every month for paying tax and National Insurance contributions.
7. Seek advice
FSB members can get in touch with our team of tax specialists for advice and guidance. It’s important to seek advice when completing your return to clarify any areas of doubt and to ensure that your submitted return is complete and correct.