If you work independently for clients as a self-employed freelancer, you may need to complete a Self Assessment tax return to report your freelance income and allowable business expenses to HMRC.
Freelancers operating as sole traders will normally need to register for Self Assessment if their gross trading income is more than £1,000 in a tax year. Different rules can apply where gross trading income is £1,000 or less, and you may also need a tax return because of other income or tax circumstances.
This guide explains Self Assessment for freelancers, including registration, freelance income, allowable expenses, Income Tax, National Insurance, payments on account, record keeping, deadlines and Making Tax Digital.
If you would prefer professional help preparing and submitting your return, our Self Assessment accountants can support you.
Currently filing your 2025/26 tax return?
The 2025/26 tax year ended on 5 April 2026. Under the current HMRC timetable:
5 October 2026 — usual notification/registration deadline where applicable
31 October 2026 — paper tax return deadline
31 January 2027 — online tax return deadline
31 January 2027 — Self Assessment payment deadline
31 July 2027 — second payment on account, where applicable
If you register after 5 October 2026, HMRC says it will normally give you a different filing deadline of three months from the date of its letter or email. However, any tax due is still normally payable by 31 January 2027.
Do Freelancers Need to File a Self Assessment Tax Return?
If you work as a self-employed freelancer, you will normally need to send a Self Assessment tax return if your gross trading income is more than £1,000 in the tax year.
Gross trading income means your freelance income before deducting allowable expenses or other tax reliefs.
If your gross trading income is £1,000 or less, the trading allowance may mean you do not need to report that income. However, exceptions apply, and you may still need or choose to complete a tax return because of other income or tax circumstances.
For example, Self Assessment may also be relevant where you have untaxed property income, savings or investment income, foreign income, certain capital gains or other amounts that need to be reported to HMRC.
Read: Self Assessment for sole traders
Are Freelancers Sole Traders for Tax Purposes?
“Freelancer” describes the way you work rather than a separate business structure for tax purposes. What matters to HMRC is how your business is legally and tax-structurally set up.
Many freelancers operate as sole traders. A sole trader works for themselves, is classed as self-employed and reports their taxable business profits through Self Assessment.
You can also be employed and self-employed at the same time. For example, you might have a PAYE job while carrying out freelance work for other clients in your own time.
A freelancer who operates through a limited company is in a different position. A limited company is legally separate from its owner, and HMRC does not treat the owner as self-employed simply because they own and work for the company.
How Do Freelancers Register for Self Assessment?
If you are freelancing as a sole trader, you register as a sole trader by registering for Self Assessment with HMRC.
You will normally need to register where your gross trading income is more than £1,000 in a tax year. Registration may also be relevant where you need to prove you are self-employed, want to make voluntary Class 2 National Insurance contributions, or need to register for another relevant self-employed scheme.
For the current 2025/26 filing cycle, HMRC says you must normally tell them by 5 October 2026 if you need to complete a tax return for the previous tax year and you have either not sent a tax return before, or you were previously registered but did not need to file for 2024/25.
If you do not already have one, HMRC will provide a Unique Taxpayer Reference (UTR) as part of the Self Assessment registration process. Keep your UTR safe because it is used when dealing with HMRC about your Self Assessment affairs.
Read: How to register for Self Assessment
What Income Does a Freelancer Report on Self Assessment?
If you freelance as a sole trader, your Self Assessment return will normally include the income and expenses relating to your freelance business.
Your freelance income may include payments from clients for services, consultancy work, project fees, commissions or other amounts earned through your self-employed activity.
You normally report your business turnover before deducting allowable business expenses. Your taxable business profit is then calculated after deducting allowable expenses and making any other relevant tax adjustments.
If you carry on more than one genuinely separate trade, profession or vocation, HMRC may require separate self-employment information for each business activity. However, having several clients within the same freelance business does not necessarily mean you have several separate trades.
Depending on your circumstances, your Self Assessment return may also need to include other taxable income such as employment income, property income, savings, dividends, foreign income or relevant capital gains.
Can You Be Employed and Freelance at the Same Time?
Yes. You can have a PAYE job and also carry out freelance work as a self-employed sole trader at the same time.
Your employer will normally deduct Income Tax and Class 1 National Insurance from your employment income through PAYE. Your freelance business is dealt with separately through Self Assessment, where you report your self-employed income and allowable business expenses.
Your overall tax position depends on your combined taxable income and circumstances. Income you receive through employment can therefore affect how much Income Tax is ultimately due on your freelance profits.
National Insurance can also apply differently to each source of income. Class 1 National Insurance may be deducted from your wages, while Class 4 National Insurance may apply to your self-employed profits.
Keeping your PAYE information and freelance records separate makes it easier to complete your Self Assessment return accurately.
What Information Should Freelancers Keep for Self Assessment?
Freelancers should keep enough records to support the figures included in their Self Assessment return.
Depending on your work, useful records may include:
- client invoices
- records of payments received
- business bank statements
- receipts and invoices for business expenses
- records of software, subscriptions and professional fees
- travel and mileage records where relevant
- records of equipment or other business assets
- PAYE documents if you are also employed
- details of other taxable income that may need to be included on the return
You do not normally send these records to HMRC with your tax return, but you must keep suitable evidence in case HMRC asks to see it.
Self-employed taxpayers must normally keep their business records for at least five years after the 31 January submission deadline for the relevant tax year.
Good bookkeeping throughout the year can make Self Assessment easier and reduce the risk of missing income or allowable expenses.
What Expenses Can Freelancers Claim?
If you freelance as a sole trader, you can normally deduct allowable business expenses when calculating your taxable business profit.
The expense must meet the relevant tax rules and relate to your business. If something is used for both business and personal purposes, you can normally claim only the identifiable business proportion.
Depending on your freelance work, allowable expenses may include:
- office costs such as stationery and qualifying phone or internet costs
- software and services used for your freelance business
- professional fees and qualifying subscriptions
- advertising, marketing and website costs
- business travel costs, excluding ordinary commuting
- qualifying costs of working from home
- staff or subcontractor costs where relevant
- business insurance, bank charges and other qualifying financial costs
- qualifying training related to your existing business
Not every cost connected in some way with work is automatically deductible. Private expenditure is not allowable simply because it was paid from a business account, and special rules can apply to areas such as travel, clothing, equipment and mixed business/private costs.
If you work from home, you may be able to claim an appropriate business proportion of certain household costs or, where eligible, use HMRC’s simplified expenses rules.
Can Freelancers Use the £1,000 Trading Allowance?
Where you are eligible, the £1,000 trading allowance can provide an alternative to deducting your actual business expenses.
If your annual gross trading income is £1,000 or less, you may not need to report that income to HMRC, although exceptions apply and you may still need or choose to complete a Self Assessment return.
If your gross trading income is more than £1,000, you may be able to deduct the trading allowance when calculating your taxable profit instead of claiming your actual business expenses.
You cannot claim the £1,000 trading allowance and also deduct actual business expenses against the same relevant trading income. Which approach is better depends on your circumstances and the level of your allowable expenses.
Read: Allowable business expenses for the self-employed
How Is Freelance Profit Taxed?
If you freelance as a sole trader, you pay Income Tax on your taxable business profits rather than simply on your turnover.
Your taxable business profit broadly starts with your freelance income minus allowable business expenses, with further tax adjustments applying where relevant.
Your final Income Tax position depends on all of your taxable income for the year. If you are also employed or receive property income, savings, dividends or other taxable income, those amounts can affect how much tax is ultimately due on your freelance profits.
For 2026/27, the standard Personal Allowance is £12,570. For taxpayers in England, Wales and Northern Ireland, Income Tax on non-savings and non-dividend income is generally charged at 20%, 40% and 45% across the relevant tax bands. Different Income Tax rates and bands apply to Scottish taxpayers.
The Personal Allowance is reduced by £1 for every £2 of adjusted net income above £100,000 and can be reduced to zero where income reaches £125,140.
If you are preparing a return for an earlier tax year, use the rates and thresholds that applied to that specific year.
National Insurance for Freelancers
Most self-employed people no longer make compulsory Class 2 National Insurance payments.
For 2026/27, if your self-employed profits are £7,105 or more, Class 2 contributions are treated as having been paid for the purpose of protecting your National Insurance record. This means there is normally no Class 2 payment to make.
If your profits are below £7,105, you do not have to pay Class 2, although you can choose to make voluntary Class 2 contributions. The voluntary Class 2 rate for 2026/27 is £3.65 per week.
Class 4 National Insurance applies where relevant self-employed profits exceed £12,570. For 2026/27, the rates are 6% on profits over £12,570 up to £50,270 and 2% on profits above £50,270.
If you are both employed and self-employed, Class 1 National Insurance may be deducted from your employment income while Class 4 may also apply to your self-employed profits.
What Are Payments on Account for Freelancers?
Payments on account are advance payments towards your next Self Assessment tax bill. For self-employed freelancers, they can also include Class 4 National Insurance.
They are normally paid in two instalments, with the first payment due on 31 January and the second on 31 July.
You will not normally need to make payments on account if your previous Self Assessment tax bill was less than £1,000, or if more than 80% of the tax you owed was collected outside Self Assessment.
Each payment is normally half of the previous year’s relevant tax liability.
This can make a January Self Assessment bill larger than expected because you may be paying both a balancing payment for the previous tax year and the first payment on account towards the next tax year.
Read: Payments on Account explained
How Does Making Tax Digital Affect Freelancers?
Making Tax Digital for Income Tax is now in operation for the first mandatory group of self-employed individuals and landlords.
You need to use Making Tax Digital for Income Tax from 6 April 2026 if your qualifying income shown on your 2024/25 tax return was more than £50,000.
The rollout then expands to qualifying income of more than £30,000 from 6 April 2027, based on the 2025/26 tax year, and more than £20,000 from 6 April 2028, based on the 2026/27 tax year.
Qualifying income is broadly your total gross income from self-employment and property before expenses and tax.
If MTD applies to you, you need compatible software to keep digital records, send quarterly updates to HMRC and submit your tax return under the MTD rules.
Read: Making Tax Digital for Income Tax
Self Assessment Deadlines for Freelancers
The main Self Assessment dates freelancers should be aware of are:
5 October — notification or registration deadline where applicable
31 October — paper Self Assessment return deadline
31 January — online Self Assessment return deadline and normal payment deadline
31 July — second payment on account deadline where payments on account apply
The exact dates for the current 2025/26 filing cycle are shown near the top of this guide.
If HMRC gives you a late notice to file, your filing deadline can be different. This does not necessarily change the date on which your tax is due.
Read: Self Assessment deadline guide
Do Freelancers Need an Accountant?
You are not legally required to use an accountant simply because you work as a freelancer. If you are comfortable managing your records, tax calculations and filing requirements, you can prepare and submit your own Self Assessment return.
An accountant may be useful where you have several sources of income, both PAYE employment and freelance income, incomplete records, uncertainty over expenses, payments on account, Making Tax Digital requirements or other more complex tax circumstances.
Accounting People can review the information you provide, prepare your Self Assessment return, explain the calculation and submit the return to HMRC where you have authorised us to act.
Read: Do freelancers need an accountant in the UK?
Speak to a Self Assessment Accountant
Frequently Asked Questions About Self Assessment for Freelancers
Do all freelancers need to complete a Self Assessment tax return?
No. If you freelance as a self-employed sole trader, you will normally need to complete Self Assessment where your gross trading income is more than £1,000 in the tax year. Other circumstances can also create a filing requirement.
How much can I earn from freelancing before registering for Self Assessment?
If your gross trading income is more than £1,000 in a tax year, you will normally need to register for Self Assessment. Where gross trading income is £1,000 or less, the trading allowance may mean you do not need to report it, although exceptions apply.
Can I be employed and freelance at the same time?
Yes. You can have PAYE employment and also work as a self-employed freelancer. Your employment income is normally taxed through PAYE, while your freelance income and expenses are dealt with through Self Assessment.
What expenses can freelancers claim?
Freelancers operating as sole traders can normally deduct qualifying business expenses when calculating taxable profit. These can include eligible office costs, software, professional fees, marketing, business travel and working-from-home costs. Private expenditure is not normally deductible.
Do freelancers pay National Insurance?
Class 4 National Insurance can apply to self-employed profits. For 2026/27, Class 4 is charged at 6% on profits over £12,570 up to £50,270 and 2% above £50,270. Class 2 is normally treated as paid where profits are £7,105 or more.
Does Making Tax Digital apply to freelancers?
It can. MTD for Income Tax applies from 6 April 2026 where 2024/25 qualifying income was more than £50,000, with the threshold expanding to more than £30,000 from April 2027 and more than £20,000 from April 2028.
How long should freelancers keep their Self Assessment records?
Self-employed taxpayers must normally keep their business records for at least five years after the 31 January submission deadline for the relevant tax year.
Get Help With Your Freelancer Self Assessment
Self Assessment is easier to manage when your freelance records are organised, your filing requirements are clear and you understand what tax may be due.
Accounting People supports freelancers with Self Assessment preparation, tax calculations, allowable business expenses, payments on account, Making Tax Digital requirements and submission to HMRC.
If you would like help preparing your return, speak to our Self Assessment team.
