HMRC improves self-assessment registration – do you need to sign up?

HMRC has rolled out a new digital service to make registering for self-assessment faster and easier ahead of the looming October 5 deadline. 

If you became self-employed, started a profitable side hustle, or earned untaxed income during the last tax year, you need to let the tax office know by this date to avoid the risk of potential fines in the future.

Here, Which? explains how the registration system has changed, who actually needs to file a return, and the most common mistakes to avoid as a first-time self-assessment taxpayer.

What has changed? 

HMRC has introduced a simpler registration system that can be accessed through your online personal tax account or the HMRC app. Designed to be more user-friendly, the new service includes

Your existing customer information automatically filled in

Clear signposting to online support while you register

A save-and-return function so you don't lose your progress

An instant confirmation email or text once you've successfully registered

Once registered, you need a 10-digit Unique Taxpayer Reference (UTR) before you can submit a tax return. Under the new digital service, your UTR will appear in your online account within 72 hours. Previously, taxpayers could wait up to 15 days.

The new digital service can only be used by individuals registering themselves. You must use the traditional registration forms (CWF1 or SA1) if: 

You use an accountant or agent to register on your behalf 

You need to apply by post because you cannot access the online system

Find out more: 

Who needs to register?

The most common reason you may sign up for self-assessment is that you are self-employed. But there are many other reasons you may need to submit a tax return to HMRC, these include: 

You earn over £1,000 a year through a side gig 

You are a partner in a business 

You earn income from renting out property 

Your total income is £150,000 or more 

You earn £10,000 or more in savings interest or dividends (outside of an Isa) 

You have £2,500 or more in other untaxed income 

You need to pay the high income child benefit charge 

You need to claim tax relief on work expenses over £2,500 

You owe capital gains tax that you haven't paid yet 

You receive foreign income, or you live abroad but have taxable UK income 

You receive income from a trust or an estate, and further tax is due 

You are a minister of religion (any faith) 

You need to claim complex tax reliefs, such as double taxation relief

If you are self-employed or a landlord, you may need to report your income through the new  system Find out more: 

4 tax mistakes to avoid if you're self-employed

If you started your self-employment on or after 6 April 2026, you won't need to worry about submitting a tax return for the 31 January 2027 deadline. But if this is your first year of self-assessment, here are four mistakes to avoid:

1. Submitting your tax return late

A deadline is a deadline, and if you miss it, it will cost you. The main deadline for self-assessment is 31 January, and this is where you have to submit your tax return and pay what you owe for the previous tax year. 

If you submit your returns by paper, your deadline is 31 October. However, if you miss this, you can still file online by the January deadline to avoid penalties.  

If you file late, you will face an automatic £100 fine on day one, followed by £10 daily charges after three months (up to £900), and additional penalties of £300 or 5% of the tax owed at both six and 12 months. 

Alongside this, paying your bill late triggers a separate set of 5% charges on the unpaid tax at 30 days, six months, and 12 months. 

Because HMRC also applies interest to both your unpaid tax and any accumulated fines, these costs can increase rapidly. It's also important to note that if you are registered as self-employed, you have to submit a return - even if you owe no tax for that year.

If you are no longer self-employed, you will need to deregister with HMRC. 

Find out more: 

2. Not saving for tax

If you are self-employed, it is important to remember that you are responsible for setting aside a portion of your earnings to pay your taxes. 

So the upcoming deadline for this year is for the tax you owe for income made during the 2025-26 tax year. 

If you don't plan ahead, you may find yourself struggling to scrape the money together at the last minute. The best way to avoid this panic is to save a percentage of everything you make as you earn it. 

Find out more: 

3. Misreporting income 

Misreporting your income is a common self-assessment mistake, and often it is innocent. You might not have included all of your income, you might overclaim or underclaim allowable expenses, or you might have simply ticked the wrong box.

This is why you should always double-check your records before submitting your return. 

Fortunately, if you realise you have made a mistake, you can correct your return online up to one year after the filing deadline. However, after that, you will need to write directly to HMRC to explain the situation and request an amendment.

If HMRC notices any minor errors in your self-assessment tax return, it may simply correct them or contact you with queries. HMRC may ask you to pay more tax, due to the error contained within your self-assessment tax return, or give you a refund if you’ve overpaid.

If you do declare the wrong amount of tax, you could face a penalty. HMRC applies penalties on top of the extra tax owed based on the severity of the error. 

If you took reasonable care, you won't face a penalty regardless of how the error is found. However, you could face a penalty of up to 30% for being careless, 20% to 70% for deliberate underestimation, and 30% to 100% if the error was deliberate and concealed.

Find out more: 

4. Not paying National Insurance contributions

For most people, National Insurance is paid alongside their income tax through PAYE. However, for self-employed individuals, it needs to be paid through the self-assessment tax return. How much you owe depends on the profits you make each year. 

Since mandatory Class 2 contributions were removed in April 2024, most self-employed people no longer have to pay Class 2 contributions. For the 2025-26 tax year:

Class 4: you pay this if your profits exceed £12,570 a year. It is calculated and paid through your annual self-assessment tax return

Class 2: if your profits are below £6,845, you can choose to pay voluntary contributions at £3.50 a week to help protect your national insurance record. If your profits are £6,845 or more, your Class 2 contributions are treated as having been paid without you actually having to pay them

If your profits are below £6,845, you can pay voluntary Class 2 contributions through your self-assessment return, or through HMRC if you don't need to file a return.

National Insurance rules differ for landlords, examiners, moderators, invigilators, people who set exam questions, ministers of religion, and people who make investments. 

Find out more: 

source https://www.which.co.uk/news/article/hmrc-improves-self-assessment-registration-do-you-need-to-sign-up-a9Pxa7S6cgLX