Self Assessment New Rules
HMRC has overhauled the penalty regime, introduced new reporting obligations and is preparing to phase out traditional Self Assessment for many taxpayers. Stay ahead of the changes.
Key Changes You Need to Know
New Penalty Points System
HMRC replaced fixed penalties with a points-based system. Each missed deadline earns a point. At 4 points, a £200 fine applies, with further £200 fines for each subsequent failure.
Late Payment Penalties Restructured
From April 2025, late payment penalties are tiered: 2% on amounts unpaid after 15 days, 4% after 30 days, then 4% per annum thereafter. Interest accrues from day 1.
MTD for Income Tax Replaces Self Assessment
From April 2026, many sole traders and landlords must move to MTD quarterly reporting instead of a single annual return. Self Assessment continues for others.
Scottish & Welsh Taxpayers
Scottish and Welsh income tax rates differ from England. Ensure your return uses the correct rates — especially important if you recently relocated.
Side Hustle Reporting
HMRC now receives trading data from platforms like eBay, Etsy, Airbnb and Vinted. Income from these platforms must be declared if it exceeds the £1,000 trading allowance.
Pension & Gift Aid Interaction
Higher and additional rate taxpayers can claim extra tax relief through Self Assessment on pension contributions and Gift Aid donations — many people miss this.
Key Deadlines
- Paper return: 31 October following the tax year end
- Online return: 31 January following the tax year end
- Pay any tax owed: 31 January (balancing payment + first payment on account)
- Second payment on account: 31 July
- Residential property CGT: within 60 days of completion
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