How do I prepare for my first self-assessment tax return?

Understanding what a Self Assessment tax return is

A Self Assessment tax return is the system used to report certain types of income and claim relevant reliefs so the tax due can be calculated. For many people in the UK, tax is normally collected automatically through PAYE (Pay As You Earn) when they are employed. But if you have income that isn’t fully taxed at source, or if your tax position is more complex, you may need to complete a Self Assessment return.

Your first return can feel daunting because it combines practical admin (registering, deadlines, online accounts) with financial organisation (records, calculations, and understanding what counts as taxable income). The good news is that most of the work is preparation: once you have your information gathered and your record-keeping method in place, completing the return becomes far more straightforward.

Check whether you actually need to file

Before you do anything else, make sure Self Assessment is required for you. Some people assume they must file because they’ve done a bit of freelance work, sold something online, or had interest or dividends, but the requirement depends on the type and level of income and your overall circumstances.

Common reasons people file include: self-employment or freelancing; being a partner in a business partnership; receiving rental income; having significant untaxed income; earning income from abroad; needing to claim certain reliefs; or having capital gains to report. Company directors and people with complex tax affairs may also need to file depending on their situation.

If you’re unsure, it’s still worth preparing the basics (keeping records, tracking income and expenses) because even if you don’t need to file this year, good habits will save you stress later.

Register early and set up your online access

If this is your first Self Assessment return, registration is one of the earliest steps. You normally register either because you’re self-employed (and need to register for Self Assessment and National Insurance) or because you have another reason to file. Registration can take time because you may need an activation code through the post to set up online access.

Practical tip: do not leave registration until the last minute. Even if you’re confident you can complete the return quickly, delays in setting up access can create unnecessary deadline pressure.

Once you have online access, you’ll be able to file electronically, view your tax calculation, check payments due, and keep an eye on what HMRC thinks you owe. Treat your login details like bank details: store them securely and ensure you can access the email address and phone number linked to your account.

Know the tax year you’re dealing with

In the UK, the tax year runs from 6 April to 5 April. Your return is based on that period, not the calendar year. This matters because invoices issued in March or April can fall into different tax years depending on the date and the accounting method used. If you’re employed and also do freelance work, you may be pulling information from P60s, P11Ds, bank statements, and invoicing tools that don’t naturally align to the tax year.

Start by creating a simple timeline: mark the start and end of the tax year, then gather records that cover exactly that window. If you’re self-employed, you may use the cash basis or traditional accruals accounting. Many first-time filers use the cash basis where income and expenses are recorded when money is received or paid, but eligibility and suitability can vary. If you’re not sure which applies, get clarity early because it affects what figures you report.

Build a checklist of everything you might need

A strong checklist is the foundation of an easy tax return. Your aim is to collect every relevant figure once, store it in one place, and avoid frantic searching later. While the exact documents depend on your situation, here’s a practical set of categories to consider:

Employment income: P60 (end-of-year summary), P45 (if you left a job), payslips, and any benefits information such as a P11D if applicable.

Self-employment or freelance income: invoices, receipts, bank deposits, payment platform summaries, and bookkeeping exports. If you use marketplaces or gig platforms, download annual statements if available.

Rental income: rent received, letting agent statements, mortgage interest statements (where relevant), and receipts for allowable property expenses.

Bank interest and savings: statements or annual interest summaries from your bank or building society.

Dividends and investments: dividend vouchers, broker statements, and any tax certificates.

Pensions: pension statements showing contributions, relief, or lump sums; details of private pension contributions if you made them personally.

Charity donations: Gift Aid records if you want to claim relief.

Capital gains: details of asset sales (shares, crypto assets, property not your main home, valuable items), purchase costs, sale proceeds, and transaction fees.

Student loan: plan type and amounts repaid, if relevant to your return.

Other income: foreign income, casual income, or anything else that wasn’t taxed through PAYE.

Even if some categories don’t apply, running through the list helps you feel confident you haven’t missed something.

Get your record-keeping in order

Your return is only as good as your records. The key is to organise information in a way that makes sense to you and can be backed up if questions arise. Many people use a spreadsheet, bookkeeping software, or even a dedicated folder system. The “best” method is the one you will actually keep up consistently.

A practical structure is to separate income and expenses and then subdivide expenses into types that often match tax return categories. For example, if you’re self-employed you might track: travel, subsistence, office costs, phone/internet, professional fees, software subscriptions, marketing, insurance, and equipment. If you have rental income, you might track: repairs and maintenance, agent fees, insurance, services, replacement of domestic items, and other property-related costs.

Keep digital copies of receipts where possible. Take photos and store them in a folder organised by month, or upload them into bookkeeping software. If you’re using bank feeds, don’t assume they replace receipts; you’ll still want evidence for many purchases.

Also separate “business” and “personal” spending as much as you can. If you’re self-employed, having a separate business bank account can dramatically reduce the time spent figuring out what each transaction was for.

Understand what counts as taxable income

A major source of confusion for first-time filers is understanding what you must report. In simple terms, taxable income includes money you earn from work and certain other sources such as property income, investment income, and some benefits or grants. Some income is taxed at source, but you may still need to report it depending on your circumstances.

If you have multiple income streams, don’t assume “HMRC already knows.” Sometimes tax is collected automatically, sometimes it isn’t, and sometimes it’s partially collected but still needs reporting so your overall position can be calculated correctly.

For self-employment, taxable profit is generally your business income minus allowable business expenses. For property income, it’s rental income minus allowable property expenses. For investments, it might be dividends or interest, and capital gains may be taxed separately depending on thresholds and allowances.

If you’ve received money that feels unusual—like a grant, a settlement, or payments from overseas—pause and check how it should be treated. Unfamiliar items are exactly where mistakes happen.

Learn the difference between turnover, profit, and tax due

Another common first-time mistake is thinking tax is calculated on what you received (turnover) rather than what you earned after costs (profit). For many self-employed people and landlords, tax is based on profit. That means legitimate costs can reduce the taxable amount.

However, profit is not the same as “cash in your pocket.” If you’ve drawn money out of your business account, bought equipment, or repaid something personal, that doesn’t necessarily affect taxable profit. This is why it helps to track transactions carefully and understand which expenses are allowable.

Tax due is then calculated based on your overall taxable income, after allowances, reliefs, and the relevant tax bands. Depending on your circumstances you may also owe National Insurance or student loan repayments through Self Assessment. The return essentially pulls everything together into one calculation.

Identify allowable expenses and what you can claim

Allowable expenses are costs incurred “wholly and exclusively” for your business (for self-employment) or costs that are allowable against rental income (for landlords). This principle matters because it prevents you from claiming personal spending as business costs, but it does allow you to claim the business portion of mixed-use expenses.

For example, if you use your phone for both personal and business calls, you might be able to claim a reasonable business proportion. If you work from home, you may be able to claim certain home office costs either through a simplified flat rate method (where available) or based on actual usage. The details can be nuanced, so a cautious, evidence-based approach is best.

Typical self-employed expenses can include: office costs, travel (when it’s business-related), professional memberships, insurance, software subscriptions, advertising, and certain equipment. For property income, common expenses include repairs (not improvements), insurance, letting agent fees, and certain services.

Be careful with big-ticket items. Some purchases are treated differently (for example, equipment may be eligible for capital allowances rather than being deducted as an everyday expense). If you’re unsure, consider professional guidance or reliable official explanations, because misclassifying these items can distort your profit figure.

Prepare for payments on account

Many first-time Self Assessment filers are surprised by “payments on account.” This is a system where, if your tax bill is over a certain amount and not mostly collected at source, you may have to make advance payments towards the next tax year’s bill. Typically, these are split into two instalments.

The impact can be significant because in your first year you might pay the tax for the year you’re filing plus an advance for the next year, making the total cash outlay feel high. This is not “extra tax,” but it is extra cash flow pressure.

A good preparation step is to set aside money regularly as you earn it. Many people use a separate savings pot for tax. A simple habit is to move a percentage of each payment you receive into a tax savings account. The right percentage depends on your profit level and tax bands, but the habit itself is what matters.

Create a “tax day” folder and keep it updated monthly

Instead of treating tax preparation as a single annual event, build a monthly routine. Set a recurring date—perhaps the first weekend of each month—to file receipts, reconcile your income and expenses, and note anything unusual (like a one-off purchase or a large refund).

Your “tax day” folder can be digital and structured like this:

1) Income: invoices issued, payments received, and platform statements.

2) Expenses: receipts grouped by category.

3) Notes: short explanations for anything that might confuse you later.

4) Documents: P60s, P11Ds, bank interest summaries, dividend statements, and anything else official.

This approach reduces the mental load of tax season because most of the work is already done.

Decide whether you’ll do it yourself or use an accountant

Many people can file their first return themselves, especially if their situation is simple: one self-employed income stream, limited expenses, and no complex investments or property. Online filing can guide you through sections in a structured way.

However, there are times when professional help can be worth it, such as if you have: multiple income streams; foreign income; capital gains; rental property; business expenses that are hard to categorise; or you simply feel anxious about getting it wrong. An accountant can also help you set up a record-keeping system and give you a sense of what to set aside for tax.

If you do use an accountant, preparation still matters. The better organised your records are, the less time they’ll spend sorting them out, and the more value you’ll get from their expertise.

Choose your tools: spreadsheet, bookkeeping software, or both

For a first return, you don’t need fancy tools, but you do need clarity. A spreadsheet is often enough if your transactions are manageable and you keep it updated. Bookkeeping software can save time by importing bank transactions, generating invoices, and producing reports, but it still requires you to categorise items correctly.

A good compromise for beginners is to use a spreadsheet for your own understanding and a simple digital folder for receipts. If your business grows or your transaction volume increases, you can migrate to software later. The important part is that your system produces a clear income total, a clear expense total, and a set of supporting documents.

Map out the deadlines and plan backward

Deadlines are one of the biggest stressors in Self Assessment, but they’re manageable if you work backward. The key dates depend on whether you file online or on paper, and when payments are due. Missing deadlines can lead to penalties and interest, so treat this as a non-negotiable part of preparation.

Create a simple plan:

Step 1: Register and get online access as early as possible.

Step 2: Gather all income documents, then gather all expense documents.

Step 3: Reconcile totals and do a “sense check” on figures.

Step 4: Complete the return with enough time to review before submitting.

Step 5: Plan how you will pay any tax due (including payments on account).

If you’re likely to owe a significant amount, consider submitting earlier so you know the figure and can budget. Submitting early doesn’t mean you must pay immediately, but it gives you clarity.

Do a “sense check” before you start filling the form

A sense check is a quick review to spot obvious issues before they become errors in your return. Look at your totals and ask:

Does my total income roughly match what I saw in my bank account and invoices?

Are my expenses plausible for my type of work (not wildly high or strangely low)?

Have I accidentally included personal spending as business costs?

Have I included everything I should, like platform fees, subscriptions, or professional fees?

Do I have an explanation for any large, unusual figure?

This is also a good moment to check you’re using the correct tax year and that you’re not mixing months from different periods.

Prepare the key figures you’ll enter

Although the return has many boxes and sections, the core numbers for many people are quite simple. If you’re self-employed, you’ll likely need: total business income, total allowable expenses, and sometimes additional information depending on the nature of your business. If you’re employed, you’ll need the figures from your P60 or P45, and potentially details of benefits.

For rental income, you’ll need total rent received and total allowable property expenses. For savings and dividends, you’ll need totals from statements. For capital gains, you’ll need proceeds and costs for each disposal, plus transaction fees.

Pull these into a single “summary” sheet or document. This becomes your master reference when you fill out the return and reduces the risk of typing different totals in different places.

Be careful with common first-time pitfalls

First-time returns often go wrong in predictable ways. Watching out for these can prevent most problems.

Mixing tax years: Make sure the income and expenses relate to the same tax year.

Using turnover as profit: Ensure you’re reporting the right figures in the right places.

Forgetting small income streams: Side gigs, occasional freelance work, and platform income can be easy to overlook.

Misclassifying expenses: Personal costs or “nice to have” items aren’t automatically allowable.

Ignoring payments on account: Budgeting only for the current bill can cause a nasty surprise.

Not keeping evidence: If you claim expenses, keep receipts and records to support them.

Rushing the submission: Most mistakes happen when people are tired and close to the deadline.

Plan how you will pay

Once you have an estimate of what you owe, decide how you’ll fund it. If you’ve been setting aside money regularly, paying will be straightforward. If you haven’t, don’t panic—build a payment plan for yourself by calculating how much you can put aside each month until the payment date. The earlier you know your bill, the more time you have to budget.

It’s often helpful to separate the “tax money” psychologically by moving it into a separate account. That way, you’re less likely to spend it on something else, and you’ll feel more in control.

If you anticipate difficulty paying, it’s better to address the issue early rather than ignoring it. Financial stress can make people avoid their return, which can lead to penalties. Preparation includes being honest with yourself about cash flow and taking steps before deadlines hit.

Set aside time for the actual completion

When you sit down to complete the return, aim for a calm, uninterrupted block of time. Have your summary sheet open, your documents accessible, and your calculator handy. If you’re filing online, you can usually save your progress and return later, but it’s still better to complete it in one or two focused sessions rather than lots of scattered attempts.

Work methodically through the sections that apply to you. Avoid the temptation to click quickly through questions without understanding them. If a question doesn’t seem to apply, read it carefully and confirm before selecting “no.” If something looks unfamiliar, pause and verify what it means based on your situation.

Review before you submit

Before you hit submit, do a final review. This is a simple but powerful step, especially for a first return.

Check your personal details (name, address, National Insurance number) are correct.

Compare key figures to your summary sheet: employment income, self-employed income, expenses, rental figures, interest, dividends, and any other relevant totals.

Confirm you haven’t duplicated income or expenses.

Look at the calculated tax outcome and ask whether it broadly makes sense given your income. The exact number may be surprising, but it should not be inexplicable. If it is, find out why before submitting.

Save a copy of your submission confirmation and the final calculation. Keep these with your records.

Keep your records after filing

Filing isn’t the end of the process. You should keep records for an appropriate period in case questions arise later. This includes invoices, receipts, bank statements, and any calculations you made (such as apportioning home office costs or phone usage).

A simple approach is to keep a single folder per tax year containing:

1) your final summary sheet

2) exports or reports from bookkeeping tools

3) supporting documents and receipts

4) confirmation of submission and payment records

This makes future returns easier because you can reuse the structure and learn from what you did the year before.

Use your first return to improve your system for next year

Your first Self Assessment return is a learning experience. Once it’s done, take a short moment to reflect on what was hardest and what would make it easier next time. Maybe you struggled to find receipts, forgot what certain transactions were, or realised your invoicing records weren’t consistent. Those are solvable problems.

Small improvements compound quickly. For example, you might decide to:

Set a monthly bookkeeping reminder.

Open a separate account for business and tax savings.

Use a consistent naming system for digital receipts.

Track mileage or travel expenses in an app or logbook.

Record notes for unusual items as they happen.

By the time you file your second return, you’ll likely find the process dramatically easier.

A simple preparation roadmap you can follow

If you want a straightforward approach, use this roadmap:

1) Confirm your filing requirement: Understand why you need to file and which income sources apply.

2) Register early: Set up online access and keep login details secure.

3) Gather documents: Use a checklist and collect everything for the correct tax year.

4) Organise records: Separate income and expenses, store receipts, and keep notes on unusual items.

5) Summarise totals: Create a single summary of income and allowable expenses, and do a sense check.

6) Complete the return calmly: Work through relevant sections, save progress, and avoid rushing.

7) Review and submit: Double-check key figures and save confirmation.

8) Plan payment: Budget for the tax due and any payments on account.

9) Improve for next year: Turn what you learned into a simple monthly routine.

Final thoughts: confidence comes from preparation

Your first Self Assessment tax return can feel like stepping into unfamiliar territory, but it becomes manageable when you focus on preparation rather than trying to “figure it out” at the last moment. Most of the stress people experience comes from missing documents, unclear records, and uncertainty about deadlines—not from the form itself.

By registering early, keeping good records, building a clear summary of your income and expenses, and giving yourself time to review, you turn the process into a structured task rather than a scramble. Once you’ve done it once, you’ll have a template for future years, and each return will feel less intimidating than the last.