New year, new taxes.
Now that we’ve taken down the Christmas decorations and popped the champagne to celebrate the arrival of 2025, it’s time to tackle something a little less festive but just as important – your Self-Assessment Tax Return.
While this is typically required if you’re self-employed, new laws introduced last year mean that more people might be liable to submit one. If you’ve taken on a side hustle, earned income from renting out property or received untaxed income from investments, you may need to file a return – even if you’ve never had to before.
We’ll break down everything you need to know – from understanding what counts as taxable income to how to submit your tax return so that you can stay on HMRC’s good side.
What is a Self-Assessment Tax Return?
A Self-Assessment Tax Return is a way to declare income and any tax you owe to HMRC. This is especially important if you’re a sole trader or freelancer, as there’s no employer to automatically deduct your tax through the PAYE (Pay As You Earn) scheme. Therefore, it’s up to you to report your earnings and pay the correct amount of tax.
The deadline to submit your Self-Assessment Tax Return is January 31st. However, if you miss this deadline, you’ll have to pay a late penalty of £100 if your tax return is up to 3 months late. The penalties only get steeper the longer you delay. After 6 months, you may face an additional fine, and after 12 months, you can be hit with even higher charges.
Filing on time is also important if you owe income tax, as HMRC will start charging interest on any unpaid tax after the deadline has passed.
What is the Side Hustle Tax?
Side hustles have become a go-to way for people to boost their income alongside their main job. After all, 43% of UK adults started a side hustle in 2024, with 65% of Millennials and Gen Z plan to continue them in 2025.
However, if you run a side hustle yourself, you’ll be liable to pay a Self-Assessment Tax Return if you earn £1,000 or more in a year – otherwise known as the Side Hustle Tax. Even if you don’t meet this threshold, you may still need to register for Self-Assessment in case you do reach this amount.
So why was this introduced?
The Side Hustle Tax isn’t an official tax, but paying taxes on earnings is required by HMRC to ensure that untaxed income from side hustles is properly reported and taxed under existing laws.
The rise in the gig economy, such as through platforms like Etsy, Uber and Airbnb, has created new opportunities for earning extra income, but it has also led to significant amounts of untaxed earnings. This is known as a “tax gap”, and with more people making money through side hustles and not always reporting it, this gap has grown. So to tackle this, HMRC is making sure that side hustle income gets declared and taxed properly so that everyone contributes fairly.
Do I need to submit a Self-Assessment Tax Return?
Not sure whether you need to submit a Self-Assessment or not? You’ll be liable if:
- You’re self-employed as a sole trader, freelancer or contractor
- You have additional untaxed income, such as rental income, side hustle earnings over £1,000 or investment income
- You had to pay capital gains tax when you sold something that increased in value
- You’re a company director
- If you earn over £60,000 for the 2024-2025 tax year and have to pay the High Income Child Benefit Charge.
If you’re still feeling stuck, we recommend seeking professional advice from an accountant. They’ll be able to tell you if you’re liable for Self-Assessment by assessing your specific financial situation, reviewing your sources of income and determining whether you need to file a tax return based on your circumstances.
How to submit a Self-Assessment Tax Return
A Self-Assessment Tax Return can either be filed online or through a SA100 form, which you can download from the government website. Alternatively, you can request one by contacting HMRC directly if you don’t have internet access.
To submit your Self-Assessment Tax Return online, simply:
- Go to the Self-Assessment sign-in page and enter your Government Gateway User ID
- Click the option to complete your Self-Assessment Tax Return and select “Start Now”
- Enter your personal information (including your name, Unique Taxpayer Reference (UTR) and date of birth
- Enter details about your income, expenses and any other relevant information.
- Submit the return online via HMRC’s portal
For a more detailed explanation, check out our guide on filing tax returns, which will walk you through each step and ensure you’re covering all the essentials. We also recommend that you talk with a tax professional to get personal advice, especially around any new law changes and how they might affect side hustle businesses or people with other additional income.
