Self Assessment: How to Complete Your HMRC Tax Return

You’re staring at a late-notice email about self assessment and wondering how to get across the finish line. That tightening feeling is normal — filing the HMRC tax return feels urgent and confusing for lots of people. Below I walk through who needs to file, the sensible options, and a step-by-step routine that actually reduces stress and late‑filing risk.

Who needs to file a self assessment tax return?

If HMRC hasn’t told you otherwise, you probably need to file a self assessment tax return when you: earn untaxed income (freelancing, contracting), receive rental income, have complex savings/dividends, are a higher‑earner with certain benefits, or owe capital gains tax. The official GOV.UK guidance lists the full criteria — check GOV.UK: Self assessment tax returns for specifics.

In my experience working with freelancers and small landlords, the two most common mistakes are underestimating what counts as taxable income and missing the registration deadline for a Government Gateway account. Both create avoidable panic close to submission time.

Why this matters now

There are real penalties attached to late self assessment submissions and late payments. That urgency drives the search spike around filing season. If you miss the online filing deadline or the payment deadline, HMRC can charge fixed penalties, interest, and escalating fines — so acting early is the simplest way to avoid a needless bill.

Options for handling your HMRC tax return (and the pros/cons)

• DIY online via HMRC: Cheapest and fastest if your affairs are straightforward. Good for sole traders with clear records. Downsides: you must understand allowable expenses and keep accurate figures.
• Commercial software (e.g., FreeAgent, QuickBooks, Taxfiler): Automates bookkeeping and integrates with bank feeds. Best if you want bookkeeping and filing together. Cost varies but often saves time and mistakes.
• Accountant or tax adviser: Helpful for complex returns (rental portfolios, capital gains, overseas income). Costs more, but reduces risk of errors and can optimise tax positions.

Which to choose? If your return is one or two income streams and simple expenses, DIY or low-cost software usually works. If you have rental properties, overseas income, or large capital gains, talk to an accountant — and get them early.

Deep dive: Filing your HMRC tax return online — step by step

Below is a practical sequence I use with clients. Follow these steps in order to keep things tidy and to minimise follow-up queries from HMRC.

1. Confirm you must file: Re-check GOV.UK criteria. If unsure, call HMRC or read the guidance page (HMRC official).
2. Register with HMRC for Self Assessment: If you haven’t registered before you’ll need to get a Unique Taxpayer Reference (UTR) and set up a Government Gateway. Registration can take days because HMRC posts activation codes — do this early.
3. Gather records: Income (invoices, PAYE payslips), bank statements, receipts for expenses, P60/P11D if applicable, details of dividends, interest, and rental income. Make a single folder (digital or physical) per tax year.
4. Choose filing route: HMRC online form, commercial software, or an accountant. If using software, connect your bank feed and import transactions early to reconcile.
5. Complete the return sections logically: Start with income sections (self‑employment, UK property), then add deductions (allowable business expenses). Fill capital gains separately and add pensions or gift aid adjustments last.
6. Double‑check figures: Reconcile totals to bank statements. Small mismatches cause HMRC queries later. If you’ve estimated, note why and keep supporting evidence.
7. Claim allowable expenses correctly: Only claim costs wholly and exclusively for business use. Home office apportionment, travel, software subscriptions, and accountancy fees are commonly allowed but must be justified.
8. Review tax calculation: The online service or software will show an estimated bill. Check the calculation against expected payments (payments on account may apply if your previous year’s tax liability exceeded the threshold).
9. Submit and save confirmation: Hit submit before the deadline. Save the submission receipt and any reference numbers. HMRC sends a confirmation — keep that with your records for six years.
10. Pay your tax: Payment methods include bank transfer, debit/credit card or direct debit. Make sure you know the payment deadline and setup in advance to avoid interest.

Common stumbling blocks and how to fix them

Here are the recurring problems I see and the quick remedies that save hours:

• Late Government Gateway activation: Register earlier. If you miss it, call HMRC and ask for an exception if you have a valid reason.
• Missing receipts: Reconstruct income from bank statements and keep a clear note explaining missing receipts — HMRC accepts reasonable reconstructions if documented.
• Confused about allowable expenses: Use the GOV.UK guidance and keep conservative claims. If you’re unsure, ask an accountant for one-off advice rather than guessing.
• Unexpected tax bill (payments on account): If your previous year’s tax was high, HMRC may require advance payments; you can apply to reduce payments on account but you must have a defensible estimate.

How to tell it’s working — success indicators

You’ve done this right if:

• You receive an HMRC submission confirmation/stamped receipt.
• Your bank reconciliation matches the return totals to within rounding error.
• You have saved a clear digital folder with all backup documents and the UTR/confirmation email.
• You understand the payment schedule and have either paid or set up a Direct Debit for the balance.

What to do if HMRC contacts you

Read the letter/email carefully — it will state what they need. Often HMRC asks for clarification, copies of receipts, or an explanation of a calculation. Respond promptly and keep a concise paper trail. If the issue is beyond your confidence, an accountant can draft a formal response that often closes the matter quickly.

Prevention and long‑term tips

• Keep routine records: A simple bookkeeping habit — update once a week — prevents end‑of‑year chaos.
• Use software early: Even the cheapest subscription that imports bank transactions saves hours and reduces errors.
• Plan for payments on account: If your tax bill jumps one year, set aside the likely payments to avoid cashflow strain.
• Review tax codes and PAYE: If you have PAYE and supplementary income, check your tax code and adjust where appropriate to avoid surprises.

When to get professional help

Get an accountant if you have rental properties, speak to clients overseas, sold assets with capital gains, or the thought of HMRC letters makes you lose sleep. Paying for professional help can pay for itself in tax savings and time saved. For impartial consumer advice check Citizens Advice.

Final practical checklist before you click submit

• Registered for Self Assessment and have your UTR.
• All income included and reconciled to bank statements.
• Allowable expenses documented with receipts or reasonable reconstructions.
• Estimated tax calculation reviewed and payment method arranged.
• Saved submission confirmation and backed up records for six years.

If you follow the steps above, filing your HMRC tax return becomes a predictable routine rather than a last‑minute scramble. It’s not glamorous, but it works — and reduces the chance of late penalties and follow‑up queries.