In 2025/26, Self Assessment is changing — and fast. Whether you're self-employed, renting out property, or earning extra income, staying on top of new rules, thresholds, and digital reporting will save you time, fines, and headaches. Let’s break down the key changes and what they mean for your tax plan today.
1. Higher Trading Income Threshold: £3,000, Not £1,000
The government is raising the threshold for filing Self Assessment from £1,000 to £3,000 gross across all “other taxable” income types — including trading, property, and more. This means up to 300,000 individuals will be exempt from filing, with many using simpler, digital reporting instead.
What to do:
If your side-income is below £3,000, you may not need to file at all.
Hit between £3,000–£50,000? Keep records and file as usual.
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2. MTD for Income Tax: Coming in 2026–2028
The rollout of Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is underway:
From April 2026: compulsory for individuals earning £50,000+ in trading or property income.
Threshold drops to £30,000 in 2027, then £20,000 in 2028.
You’ll need MTD-compatible software and quarterly reporting features.
What to do today:
If you’re close to thresholds, start testing software now.
If you’re under, track your income clearly so you’re prepared for upcoming thresholds.
3. New HMRC Services & Payment Flexibility
HMRC recently added several customer-friendly features:
Easier Self Assessment registration and opt-out
Improved penalty appeals interface
Options to spread Payments on Account
Clearer on-screen messaging throughout the filing process
Reminder:
Payment on Account #2 is due 31 July 2025
Filing and payment for 2024/25: 31 January 2026
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4. National Insurance & Minimum Wage Updates
Major updates in April 2025:
Employer NIC rate rises from 13.8% to 15%
Threshold lowers from £9,100 to £5,000
For freelancers employing others, expect increased PAYE costs and plan accordingly.
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5. ⏰ Why You Should File Early & Plan Ahead
Filing early helps avoid phishing scams and rush-season panic.
It gives time to adjust Payments on Account based on income.
You can contest penalties and tailor your payment schedule before 31 January
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