UK Self Assessment and MTD ITSA Explained: Deadlines, Payments and the 2026 Changes

If you're self-employed, a landlord, or earn income HMRC doesn't already tax at source, Self Assessment is how you report it. From April 2026, the system is changing for many people. Here's what applies to you, and when.

What is Self Assessment?

Self Assessment is HMRC's system for individuals to report income and calculate tax owed on anything not automatically taxed through PAYE. You'll typically need to file a return if you:

• Are self-employed and earned more than £1,000 (before expenses) in the tax year
• Are a partner in a business partnership
• Have rental income from property
• Earn significant income from savings, investments, or dividends
• Have untaxed income HMRC hasn't already collected through your tax code
• Are a company director in some circumstances (though not automatically just for being a director)

The UK tax year runs from 6 April to 5 April the following year. The 2025/26 tax year, for example, runs from 6 April 2025 to 5 April 2026, and the return for it is due by 31 January 2027.

Key Self Assessment deadlines

• 5 October: register for Self Assessment if you're newly self-employed or have new untaxed income (following the tax year it applies to)
• 31 October: paper return deadline (almost nobody files on paper anymore, since online filing gives you more time)
• 31 January: online return deadline, and the deadline to pay any tax owed for that year

Missing the online deadline triggers an automatic £100 penalty, even if you owe no tax, with further penalties accruing the longer you delay.

Personal Allowance and tax bands (2025/26)

• Personal Allowance: £12,570 (the amount you can earn before paying Income Tax)
• Income above this is taxed at 20% (basic rate), 40% (higher rate), or 45% (additional rate), depending on your total income level

National Insurance for the self-employed

• Class 4 NI: 6% on profits between £12,570 and £50,270, then 2% on profits above £50,270
• Class 2 NI: no longer mandatory, but voluntary at £3.50 a week if your profits are below the Small Profits Threshold (£6,845) and you want to protect your State Pension record. Above that threshold, you get National Insurance credits automatically with nothing to pay.

If you're comparing this to how an employee is taxed instead, our UK payroll guide covers employee and employer National Insurance rates.

Payments on account: the part that catches people out

If your Self Assessment bill is over £1,000, and less than 80% of your tax was already collected at source (e.g. through PAYE), HMRC requires payments on account, advance instalments toward your next year's tax bill.

Each instalment is 50% of your previous year's Income Tax plus Class 4 National Insurance (Capital Gains Tax, student loan repayments, and Class 2 NI are excluded and settle separately with your balancing payment).

• First instalment: 31 January, paid alongside your balancing payment for the previous year
• Second instalment: 31 July

This means a first-time Self Assessment filer with a large bill can face one and a half years of tax in a single January payment: the balancing payment for the year just finished, plus the first payment on account toward the year still in progress. This is one of the most common cash-flow shocks we see with new clients, and it's entirely predictable if you know it's coming.

If you expect your income to fall, you can apply to reduce your payments on account (form SA303), but reducing them too far when your income doesn't actually fall triggers interest on the shortfall.

Making Tax Digital for Income Tax (MTD ITSA): what's changing

This is the biggest change to Self Assessment in years, and it's now live. It mirrors the shift VAT-registered businesses already went through under mandatory MTD for VAT, see our VAT guide for how that system works in practice.

MTD for Income Tax replaces the old annual tax return process (for those it applies to) with:

• Digital record-keeping using HMRC-recognised software
• Quarterly updates submitted to HMRC throughout the year
• A final declaration at year-end, replacing the traditional Self Assessment return

Who it applies to, and when

Gross qualifying income (self-employment plus property)	Mandatory from
Over £50,000	6 April 2026
Over £30,000	6 April 2027
Over £20,000	Expected 2028/29 tax year

"Qualifying income" means your gross self-employment and property income combined, before expenses. Income from salary, dividends, savings, or pensions doesn't count toward this threshold.

Important: if your only income is salary and dividends from your own limited company, with no self-employment or rental income, MTD ITSA doesn't apply to you at all, you remain outside its scope regardless of how much you earn.

What "qualifying income" is measured against

HMRC looks at your gross income from the relevant tax year to determine whether you're mandated for the following one. For example, a taxi driver earning £57,000 gross in the 2024/25 tax year fell into the first mandatory phase starting April 2026.

If you're newly self-employed

If your self-employment or landlord income is new (you've just started trading), you'll use the traditional Self Assessment system until HMRC can assess a full year of your income against the thresholds. You won't be forced into MTD partway through your first year.

How Books & Returns helps

Between payments on account catching people off guard and the MTD ITSA rollout changing how sole traders and landlords need to keep records, Self Assessment has gotten genuinely more complex, not less. We handle registration, quarterly MTD submissions, annual filings, and payment-on-account planning, so you always know what's coming and when it's due, rather than finding out in January.

This guide is for general information only and does not constitute tax advice. Self Assessment and MTD rules depend on your specific circumstances, always confirm your position with a qualified accountant or check current guidance at gov.uk before making decisions based on this content.