What do first-time UK Self Assessment filers need to know for the 2024/25 tax year?

write a 50 word excerpt for SEO for the following article and place the excerpt between tags.What first-time UK Self Assessment filers need to know for the 2024/25 tax year Filing a UK Self Assessment tax return for the first time can feel daunting, particularly if you are new to self-employment, have started earning untaxed income, or have recently moved into a more complex financial situation. The 2024/25 tax year brings with it a mixture of familiar rules and recent changes that first-time filers need to understand in order to stay compliant, avoid penalties, and pay no more tax than is legally due. This article is designed as a comprehensive guide for people submitting a UK Self Assessment return for the first time for the 2024/25 tax year. It explains who needs to file, important deadlines, what income must be reported, how expenses work, how tax and National Insurance are calculated, and what practical steps you can take to make the process smoother. While it cannot replace personalised professional advice, it should give you a solid foundation and confidence as you approach your first return. Understanding what Self Assessment is Self Assessment is the system used by HM Revenue & Customs (HMRC) to collect Income Tax from people whose tax is not automatically deducted through PAYE (Pay As You Earn). Under Self Assessment, you are responsible for calculating and reporting your own income and gains, claiming any allowable reliefs, and paying the correct amount of tax by the required deadlines. For employees who only earn salary taxed under PAYE, there is usually no need to file a Self Assessment return. However, once you step outside that simple scenario, HMRC often requires you to complete one. The key point for first-time filers is that Self Assessment is not optional if you meet the criteria. Registering and filing late can lead to penalties even if you ultimately owe little or no tax. The 2024/25 tax year at a glance The UK tax year for 2024/25 runs from 6 April 2024 to 5 April 2025. Any income you receive within this period generally needs to be considered for your 2024/25 Self Assessment return. The main online filing deadline for the 2024/25 tax year is 31 January 2026. If you choose to file a paper return, the deadline is earlier: 31 October 2025. Most first-time filers use the online system, which provides more time and includes built-in checks to reduce errors. Tax owed for the year is also normally due by 31 January 2026. Depending on how much tax you owe, you may also need to make payments on account towards the following tax year, which can catch first-time filers by surprise. Who needs to file a Self Assessment return for the first time? You may need to file a Self Assessment return for the first time in 2024/25 if any of the following apply to you: You are self-employed or a sole trader and earned more than £1,000 from self-employment during the tax year. This £1,000 threshold refers to turnover, not profit. You became a partner in a business partnership. You had income from renting out property, whether in the UK or overseas. You earned significant income from investments, such as dividends or savings interest, that is not fully covered by allowances. You had foreign income or gains. You received income from trusts, settlements, or estates. You earned over £100,000 in total income, even if all of it was taxed under PAYE. You or your partner claimed Child Benefit and one of you had income over £50,000, triggering the High Income Child Benefit Charge. First-time filers are often surprised to learn that HMRC may expect a return even if no additional tax is due. The obligation to file is about reporting, not just paying tax. Registering for Self Assessment If you have never filed a Self Assessment return before, you must register with HMRC. Registration is separate from filing and must be done in advance. For the 2024/25 tax year, you generally need to register by 5 October 2025 if you have not previously been in Self Assessment. Missing this deadline can lead to penalties, even if you file and pay on time later. Once registered, HMRC will issue you with a Unique Taxpayer Reference (UTR). This ten-digit number is essential for filing your return and dealing with HMRC. It can take several weeks to arrive, so registering early is strongly recommended for first-time filers. Types of income you must report A common source of errors for new filers is misunderstanding what income needs to be included. In general, you must report all taxable income you received during the tax year, even if tax has already been deducted. This includes self-employment income, such as fees, sales, and commissions. It also includes casual or side income, for example from freelance work or online platforms, unless it falls entirely within an allowance. Employment income taxed under PAYE must still be reported if you are filing a return, although the tax already deducted will be taken into account. Rental income from property must be declared, including income from UK residential property and overseas property. Different rules may apply depending on whether the property is furnished and where it is located. Investment income such as dividends and bank interest needs to be included if it exceeds relevant allowances or if HMRC requires you to report it for other reasons. Foreign income and gains are particularly important to get right. Even if tax has been paid abroad, you may still need to report the income in the UK and claim relief to avoid double taxation. Allowances and tax bands for 2024/25 Understanding allowances and tax bands is key to estimating how much tax you might owe. For the 2024/25 tax year, the Personal Allowance remains £12,570 for most people. This is the amount of income you can earn before paying Income Tax. If your income exceeds £100,000, the Personal Allowance is gradually reduced and can be lost entirely. The basic rate of Income Tax is 20% and applies to taxable income up to £37,700 above the Personal Allowance. The higher rate of 40% applies to income above that threshold, and the additional rate of 45% applies to income over £125,140. There are also specific allowances for savings interest and dividends, though these have been reduced in recent years. First-time filers should not assume that small amounts of investment income are automatically tax-free without checking how these allowances apply to their overall income. Expenses and deductions: what can you claim? One of the advantages of Self Assessment is the ability to deduct allowable expenses from your income before calculating tax. This is particularly important for self-employed individuals. Allowable expenses are costs that are incurred wholly and exclusively for the purposes of your business. Common examples include office costs, travel expenses, marketing, professional fees, and certain insurance costs. If you work from home, you may be able to claim a proportion of household costs such as heating and electricity, or use simplified flat-rate expenses provided by HMRC. For first-time filers, the challenge is often understanding what is and is not allowable. Personal expenses, or costs with a significant private element, are generally not deductible. Keeping clear records and being cautious in your claims can help avoid problems later. Record keeping and evidence Good record keeping is essential for completing your return accurately and for defending your position if HMRC ever asks questions. You should keep records of income, invoices, receipts, bank statements, and any other documents that support the figures on your return. For the 2024/25 tax year, records generally need to be kept for at least five years after the 31 January submission deadline. Digital record keeping is increasingly encouraged, and many first-time filers find accounting software or even well-organised spreadsheets helpful. The key is that your records are complete, accurate, and accessible. National Insurance contributions for first-time filers If you are self-employed, you may need to pay National Insurance contributions (NICs) in addition to Income Tax. From April 2024, Class 2 National Insurance contributions have been abolished for most self-employed people. Instead, entitlement to certain benefits is protected automatically if your profits exceed the Small Profits Threshold, or you can choose to pay voluntary contributions. Class 4 National Insurance contributions still apply to self-employed profits. For 2024/25, these are charged at 6% on profits between the lower and upper limits, and 2% on profits above that. First-time filers are often surprised by the combined impact of Income Tax and National Insurance, so it is wise to budget for both. Payments on account explained One of the most confusing aspects of Self Assessment for newcomers is payments on account. If your tax bill for the year exceeds £1,000 and less than 80% of your tax was collected at source, HMRC will usually require you to make payments on account towards the following tax year. These payments are made in two instalments: one on 31 January and one on 31 July. Each instalment is typically half of the previous year’s tax bill. For first-time filers, this can mean paying more than expected in January, as you are effectively paying for two years at once. Understanding this in advance can help you avoid cash flow shocks. How to complete and submit your return Most first-time filers complete their Self Assessment return online using HMRC’s digital service. The online system guides you through a series of questions to determine which sections you need to complete. It then calculates your tax automatically based on the information you provide. While the system is user-friendly, it relies entirely on the accuracy of your inputs. Taking time to review each section carefully before submission can prevent costly mistakes. Once submitted, you will receive a confirmation and be able to view your tax calculation immediately. Common mistakes first-time filers should avoid First-time filers often make similar errors. These include missing registration deadlines, underreporting income, overclaiming expenses, and misunderstanding payments on account. Another common mistake is leaving the return until the last minute. While the deadline may seem far away, technical issues, missing information, or unexpected questions can easily cause delays. Failing to budget for the tax bill is also a frequent problem. Unlike PAYE, no tax is deducted automatically from self-employed income, so it is up to you to set money aside. Penalties and interest HMRC imposes penalties for late filing and late payment, even if the amounts involved are small. An automatic penalty applies if your return is filed after the deadline, followed by daily penalties if the delay continues. Interest is also charged on late-paid tax. For first-time filers, these penalties can feel harsh, but they are largely avoidable with timely action and good planning. When to consider professional help While many first-time filers successfully complete their returns самостоятельно, there are situations where professional advice can be valuable. If you have multiple income sources, foreign income, complex expenses, or significant tax liabilities, an accountant or tax adviser can help ensure accuracy and compliance. Professional fees are often deductible as an expense if they relate to your business or rental income, which can reduce the overall cost. Looking ahead: preparing for future tax years Your first Self Assessment return is also an opportunity to put good systems in place for the future. Regularly updating your records, setting aside money for tax, and reviewing your position during the year can make future returns much less stressful. The UK tax system continues to move towards greater digitalisation, with changes planned under Making Tax Digital for Income Tax in coming years. Becoming comfortable with digital record keeping now can help you adapt more easily later. Final thoughts for first-time filers Filing your first UK Self Assessment return for the 2024/25 tax year may seem complex, but with the right preparation and understanding, it is manageable. By knowing whether you need to file, registering on time, keeping good records, and understanding how tax and National Insurance are calculated, you can approach the process with confidence. Most importantly, do not be afraid to seek help if you are unsure. Taking the time to get your first return right can save you money, stress, and time in the long run, and set you up for smoother compliance in future tax years.