Learn what income and expenses to report for your 2025 to 2026 tax return and avoid common mistakes.
If you are self employed in the UK, understanding what you must report to HMRC is essential for completing your Self Assessment tax return correctly.
Many sole traders worry about missing income, claiming the wrong expenses, or making mistakes that could lead to penalties. The good news is that with organised records and the right guidance, managing your tax return can become much simpler.
This guide explains what self employed individuals need to report for the 2025 to 2026 tax year and how to avoid common issues.
Who must complete a Self Assessment tax return
If you work as a sole trader and earn income from self employment, you will usually need to complete a Self Assessment tax return.
This applies whether you work full time, part time, or alongside other employment.
You may need to register with HMRC if:
• You started self employment during the tax year
• Your income exceeds HMRC reporting thresholds
• You receive untaxed business income
Registering correctly and early helps avoid delays and penalties.
What self employed income you must report
Your self employed tax return UK must include all business income earned during the tax year.
This may include:
• Payments from clients or customers
• Cash income
• Online sales or freelance earnings
• Business related commissions or fees
It is important to report your total income accurately, even if you work with multiple customers or platforms.
Keeping organised records throughout the year will make this process much easier.
What allowable expenses you can claim
As a self employed individual, you can usually claim allowable expenses that are wholly and exclusively for business purposes.
Common examples include:
• Office and business supplies
• Mobile phone and internet costs used for work
• Travel and mileage expenses
• Professional fees and insurance
• Marketing and advertising costs
Claiming the correct expenses can reduce your taxable profit and lower your tax bill.
Home working and business use expenses
If you work from home, you may also be able to claim a portion of household costs.
This can include:
• Electricity and heating
• Broadband usage
• Rent or mortgage interest in some situations
HMRC allows simplified flat rate claims in some cases, or you may calculate actual business use costs.
Keeping clear records will help support your claim.
Records you should keep for HMRC
Good record keeping is one of the most important parts of managing your sole trader tax 2025 to 26 obligations.
You should keep:
• Invoices and receipts
• Bank statements
• Expense records
• Mileage logs where applicable
HMRC may ask for evidence to support the information in your Self Assessment return.
Keeping records organised throughout the year will save time and reduce stress later.
Common mistakes self employed individuals make
Many taxpayers make simple mistakes that can cause problems with HMRC.
Common issues include:
• Forgetting to report all income
• Claiming personal expenses incorrectly
• Losing receipts or invoices
• Leaving tax preparation until the last minute
Reviewing your records carefully before filing can help avoid these problems.
Understanding your tax and National Insurance
Self employed individuals may need to pay:
• Income Tax on taxable profits
• Class 2 and Class 4 National Insurance contributions depending on income levels
Understanding your expected tax position early can help you plan ahead for payments and avoid financial pressure later.
Why early preparation helps
Starting your tax preparation early gives you more time to organise records and correct mistakes.
Early preparation can help you:
• Avoid rushed submissions
• Identify missing expenses
• Understand your tax liability sooner
• Reduce stress before deadlines
Simple habits throughout the year can make a significant difference.
How professional support can help
Managing your own Self Assessment can feel overwhelming, especially if your income or expenses are more complex.
Professional support can help you:
• Prepare your self employed tax return accurately
• Identify all allowable expenses
• Stay compliant with HMRC reporting requirements
• Avoid unnecessary penalties or overpayments
Getting expert guidance can give you peace of mind and confidence in your tax position.
Final thoughts for self employed taxpayers
Understanding what to report on your self employed tax return UK is essential for staying compliant and avoiding unnecessary stress.
Keeping accurate records, reporting all income, and claiming the right expenses will help you manage your tax affairs properly for the 2025 to 2026 tax year.