A Self Assessment Guide for Freelancers and Contractors

Freelancers and contractors often have multiple clients, varied projects, and different income sources. While this flexibility is a big advantage, it also makes managing tax more complex. Filing a Self Assessment tax return correctly ensures you stay compliant with HMRC, pay the right amount of tax, and claim all the expenses you’re entitled to.

Who Needs to File?

You’ll need to complete a Self Assessment if you:

• Are self-employed and earn more than £1,000 in a tax year

• Work as a contractor under IR35 and receive untaxed income

• Earn income outside PAYE (for example, side hustles, freelance gigs, or rental income)
  

Tracking Income and Expenses

Good record-keeping makes tax season easier and ensures accuracy.

• Keep copies of all invoices and receipts

• Use accounting software to track payments and expenses in real time

• Separate business and personal finances to avoid confusion
  

Allowable Expenses

Claiming legitimate expenses reduces your tax bill. Common examples include:

• Business software & subscriptions (accounting tools, design apps, cloud storage)

• Work-related travel (train tickets, mileage, accommodation — but not commuting)

• Home office costs (a portion of rent, utilities, and internet if you work from home)

• Professional training & courses directly related to your trade

Filing Tips

• Register early: Sign up for Self Assessment by 5 October if it’s your first time