If you are asking "do I need to file a tax return", the answer turns on the type and level of income you receive, not on whether you class yourself as self-employed. The Self Assessment threshold is really a set of thresholds, one for each kind of income, and most people who only earn wages or a pension through PAYE do not need to file at all. This guide sets out who still has to send a return, the income levels that trigger it, and where the rules are heading as Making Tax Digital for Income Tax is phased in.
Who still needs to file a Self Assessment return?
You usually need to complete a Self Assessment return if you have income that has not already been taxed at source. The most common triggers are self-employment or trading income above the trading allowance, rental income above the property allowance, and untaxed income such as some savings, dividends, tips or commission. Company directors, people with higher incomes that HMRC asks to report, and those liable to certain charges may also need to file. If you are unsure, HMRC has a short online tool that checks your position at gov.uk/check-if-you-need-tax-return.
Where a return is required, you must register for Self Assessment by 5 October following the end of the tax year (so 5 October 2026 for the 2025/26 tax year), then file online by the following 31 January.
What are the Self Assessment thresholds for self-employment and property income?
Two £1,000 allowances do most of the work for smaller amounts of income.
The trading allowance is £1,000 (2026/27). If your gross trading or miscellaneous income for the year is £1,000 or less, it is covered by the allowance and you do not need to report it. Above £1,000, you generally need to register and file.
The property allowance is also £1,000 (2026/27) and works the same way for rental income. If your gross rental income is £1,000 or less, it is usually covered. Above that, you normally need to declare it, and you can choose either to deduct the £1,000 allowance or to claim your actual expenses, whichever gives the better result. Both allowances are set out on gov.uk at tax-free allowances on property and trading income.
| Your situation | Return usually needed? |
|---|---|
| Trading or side income of £1,000 or less (2026/27 trading allowance) | No, covered by the trading allowance |
| Trading or self-employment income above £1,000 (2026/27) | Yes, register for Self Assessment |
| Rental income of £1,000 or less (2026/27 property allowance) | Usually no, covered by the property allowance |
| Rental income above £1,000 (2026/27) | Usually yes |
| Only wages or a pension, all taxed through PAYE | Usually no |
| Untaxed income (some savings, dividends, tips or commission) | Often yes, check with HMRC |
I only earn through PAYE. Do I need to file?
Usually not. If all your income is wages or a pension and the correct tax is already collected through PAYE, your tax code does the job and no return is needed. You may still be asked to file, or may want to, if you have other untaxed income, if you need to claim certain reliefs, or if HMRC issues you with a notice to complete a return. A notice to file is a legal requirement even if you think no tax is due, so do not ignore it.
What about the plan to raise the reporting threshold?
The government has said it intends to raise the level of gross trading income at which sole traders must report through Self Assessment, from the current £1,000 to £3,000, at some point within this Parliament. It has also signalled a similar direction for property and other income. As things stand, no firm start date has been confirmed in legislation, so we would not plan around a specific tax year yet. Importantly, a higher reporting threshold only removes the requirement to file a return. It does not remove any tax due, and HMRC has said it will provide a simpler online route to collect tax from those who no longer file. You can track the current position on gov.uk.
How does Making Tax Digital change this?
The direction of travel is towards digital record keeping and quarterly updates rather than a single annual return. Making Tax Digital for Income Tax is being phased in by income level: it is mandatory from 6 April 2026 for those with qualifying income over £50,000, from 6 April 2027 for income over £30,000, and from 6 April 2028 for income over £20,000. Qualifying income here means combined gross income from self-employment and property. If you are brought into the regime, you will keep digital records and send quarterly updates to HMRC using compatible software. The thresholds and start dates are set out at gov.uk's Making Tax Digital for Income Tax guidance. Getting your records in order early makes the switch far less disruptive, and it sits naturally alongside wider tax planning. If HMRC has questions about a return, our note on HMRC's new compliance check service explains what a check involves.
Frequently Asked Questions
If your gross income from the side activity is £1,000 or less in the tax year, it is covered by the trading allowance (£1,000 for 2026/27) and you do not need to report it. Once gross income goes above £1,000, you normally need to register for Self Assessment and file a return.
Usually not. If all your income is taxed through PAYE, no return is generally needed. You may need to file if you have untaxed income on top, if you want to claim certain reliefs, or if HMRC sends you a notice to complete a return, which remains a legal requirement even where no extra tax is due.
The government has said it plans to raise the gross trading income reporting threshold from £1,000 to £3,000 within this Parliament, but no firm commencement date has been set in legislation yet. We would not rely on a specific tax year until it is confirmed. A higher threshold only removes the need to file, not any tax due.
For those it applies to, Making Tax Digital for Income Tax replaces the single annual return with digital records and quarterly updates. It is being phased in by income level: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028, based on combined self-employment and property income.
If you are not sure whether you still need to file, or whether Making Tax Digital will apply to you, we can check your position and set up your records the right way. Call us on 020 8554 2135 or email info@visionconsulting.co.uk, or use our contact page.
By the Vision Consulting team.
This is general information, not advice. Your position depends on your circumstances.