If you’re self-employed as a tradesperson in the UK, you need to file a Self Assessment tax return each year. HMRC uses it to calculate what income tax and National Insurance you owe on your earnings. Miss the deadline or get it wrong, and there are automatic penalties — regardless of whether you actually owe any tax.
The good news: once you understand the structure, it’s not as complicated as most people expect. This guide walks through exactly what you need to do, what you can claim, and what’s changing in 2026.
Key Takeaways
- You must register for Self Assessment if your self-employment income exceeds £1,000 in a tax year — this is the HMRC trading allowance threshold
- The online filing deadline is 31 January each year, covering income from the previous April to April tax year
- Tradespeople can deduct a wide range of business expenses — tools, materials, van costs, workwear, and more
- CIS subcontractors can reclaim overpaid deductions through their Self Assessment return — many are owed money back and don’t realise it
- Making Tax Digital for Income Tax starts April 2026 for sole traders earning over £50,000 — quarterly digital reporting will be required
Do You Need to File a Self Assessment Return?
You need to register for Self Assessment if any of the following apply:
- You earned more than £1,000 from self-employment in the tax year (after the trading allowance)
- You’re a partner in a business partnership
- You have income from property rentals
- You earn over £100,000 per year from any source
For most tradespeople working as sole traders or on a self-employed basis, the answer is yes. Even if you also have a PAYE job, any self-employment income above £1,000 must be declared separately.
If you’re registered under the Construction Industry Scheme (CIS), you still need to file Self Assessment. Your Self Assessment return is also where you reclaim any CIS deductions taken from your payments during the year — which can result in a significant refund.
Key Dates and Deadlines
Miss these dates and you’ll face automatic penalties, starting at £100 for a late filing even if you owe no tax.
| Deadline | What It Covers |
|---|---|
| 5 April | End of the tax year |
| 5 October | Register for Self Assessment if you’re newly self-employed (for the tax year just ended) |
| 31 October | Deadline for filing a paper return |
| 31 January | Deadline for online filing and paying any tax owed |
| 31 July | Second payment on account (if applicable) |
According to HMRC, late filing penalties start at £100 immediately after the deadline, rising to £10 per day after three months (up to £900), then further charges at six and twelve months. Interest also accrues on unpaid tax.
What Income to Declare
You need to declare all self-employment income — cash jobs included. HMRC cross-references returns against bank accounts, CIS records, and third-party data. Declaring everything is far safer than hoping they won’t notice.
Include:
- Payments from customers (invoiced or cash)
- CIS payments you’ve received (before any deductions)
- Any other business income (selling old tools, for example)
Don’t include money you’ve borrowed, VAT you’ve collected (if VAT registered), or CIS deductions taken from your payments — those are reported separately.
Allowable Expenses for Tradespeople
This is where Self Assessment works in your favour. You can deduct legitimate business expenses from your income before tax is calculated. Here’s what’s typically claimable for UK tradespeople:
| Expense Category | Examples |
|---|---|
| Tools and equipment | Power tools, hand tools, testing equipment |
| Van and vehicle costs | Fuel, insurance, servicing, road tax (business use proportion) |
| Materials | Any materials bought specifically for a job |
| Workwear | Protective gear, branded uniforms (not regular clothing) |
| Phone and broadband | Business proportion of your monthly bills |
| Public liability insurance | Full premium is deductible |
| Training and courses | Upskilling related to your current trade |
| Accountant fees | The cost of filing your return can itself be claimed |
| Home office | If you do admin work from home, a proportion of costs |
You can’t claim costs that are purely personal, or the commute from home to your regular workplace. If you use your van for both work and personal trips, only the business proportion is deductible.
For fuel, you can either claim your actual fuel costs (keeping receipts) or use HMRC’s approved mileage rate: 45p per mile for the first 10,000 business miles, 25p per mile after that.
How to File Your Return: Step by Step
Step 1: Register with HMRC
If you haven’t filed before, register for Self Assessment on GOV.UK. You’ll need a Government Gateway account. HMRC will send you a Unique Taxpayer Reference (UTR) number by post — this takes up to 10 working days, so don’t leave registration until January.
Step 2: Gather your records
Before you log in, get together:
- Total income from self-employment
- CIS deduction statements (if applicable)
- Receipts and invoices for all business expenses
- Bank statements for cross-checking
- Any employment income (P60 from an employer if you also have a PAYE job)
Step 3: Complete the return
Log into your HMRC online account and work through the return. For most sole traders, this means completing the main tax return (SA100) and the self-employment supplementary pages (SA103S for simple accounts, or SA103F if your turnover exceeds £85,000).
Step 4: Check your calculation
HMRC’s system calculates your tax bill automatically. Before submitting, check:
- Your income figure matches your records
- All expenses are included
- CIS deductions are entered correctly (they reduce your bill)
Step 5: Pay what you owe
Tax is due by 31 January. If your bill is over £1,000, HMRC may also ask for two ‘payments on account’ — advance payments towards next year’s bill, split between 31 January and 31 July.
Making Tax Digital: What’s Changing in 2026
Making Tax Digital (MTD) for Income Tax is being rolled out in phases. According to HMRC’s confirmed schedule:
- April 2026: Sole traders and landlords earning over £50,000 must use MTD-compatible software and submit quarterly digital updates
- April 2027: The threshold drops to £30,000
- April 2028: Extended to those earning over £20,000
This means the traditional once-a-year Self Assessment return is being replaced with quarterly updates through compatible software (such as FreeAgent, QuickBooks, or Xero), followed by a final year-end declaration.
If you earn under £50,000, nothing changes immediately. But if you’re above that threshold, you’ll need to start using MTD-compatible software before April 2026.
CIS Subcontractors: Your Return Can Pay Out
If a contractor deducts CIS tax from your payments throughout the year, those deductions are often more than your actual tax liability. Your Self Assessment return is where you declare the total CIS deductions taken, and HMRC refunds the difference.
According to HMRC data, around 25% of CIS subcontractors receive a repayment after filing. The average refund is several hundred pounds. If you haven’t been filing Self Assessment, you may have overpaid without claiming it back.
Frequently Asked Questions
Do I need to file Self Assessment if I only do small cash jobs? Yes, if your total self-employment income is over £1,000 in a tax year, you must register and file. The £1,000 trading allowance means you only start paying tax above that point, but you still need to declare it.
What happens if I miss the 31 January deadline? HMRC automatically charges a £100 penalty the day after the deadline, regardless of whether you owe tax. Penalties increase further at three months, six months, and twelve months. Interest also accrues on any unpaid tax.
Can I do my own Self Assessment or do I need an accountant? Many tradespeople file successfully without an accountant, particularly if their finances are straightforward. Using accounting software makes it much easier. An accountant is worth considering if you have complex expenses, employ staff, or are part of a CIS contractor arrangement — the fee is also tax-deductible.
What records should I keep and for how long? HMRC requires you to keep records for at least five years after the 31 January filing deadline for that tax year. Keep receipts, bank statements, invoices, and mileage logs. Digital records are fine.
Do I still pay National Insurance through Self Assessment? Yes. Class 4 National Insurance (9% on profits between £12,570 and £50,270, and 2% above that) is calculated and paid through your Self Assessment return. Class 2 National Insurance has been abolished as a separate charge from April 2024 and is now included within the Class 4 calculation for most self-employed people.
Getting your tax affairs straight removes a significant source of stress when running a trade business. If you’re building your business and want to attract more customers online, a professional website helps just as much as having clean finances. Digital Tradies builds websites for UK tradespeople from £49/month — no upfront cost, live in 3 days.
Related reading: CIS Scheme Explained for Tradespeople | Best Accounting Software for Tradespeople UK 2026
