Registering for Self-Assessment
For most UK workers and pensioners, tax is taken automatically through Pay As You Earn (PAYE), so you usually don’t have to worry about filing a tax return. However, if you earn extra money from a side hustle or renting out a room you might need to inform HMRC. If your side income stays below certain tax-free allowances, you may not need to report it—but it’s important to keep good records just in case.
Let me guide you through the main situations when you might need to register for self-assessment and how to keep things hassle-free with HMRC.
Earning a bit of cash from renting out property?
If your gross rental income is less than £1,000 you do not have to report it. However, if your gross income exceeds £1,000 you must notify HMRC and if the profit from renting property is over £2,500, you must register for self-assessment.
If you’re renting out a furnished room in your own home, you might qualify for the Rent a Room scheme. Under this, if your income is less than £7,500 each year it’s tax-free—and you don’t need to report it. That’s right: you can make decent money from a lodger and still stay on HMRC’s good side.
Earning from Savings or Investments?
For the 2025/26 tax year, if you’re making money from savings or investments, there are a few important thresholds to keep in mind.
If your savings income goes over £1,000 (or £500 if you’re a higher-rate taxpayer), or if your investment income tops £500, you’ll need to let HMRC know. And if your total income from savings and investments adds up to more than £10,000, you’ll need to go one step further and register for self-assessment—even if you’ve never filed a tax return before.
So, if your interest, dividends, or other investment returns are growing nicely, make sure your paperwork keeps up.
Side Hustle or Just a One-Off Sale?
Thinking of selling your handmade crafts, flipping vintage finds, or offering freelance services online? If you’re bringing in less than £1,000 a year in sales there’s good news: you don’t need to report it to HMRC. This falls under the trading allowance, designed to keep things simple for casual earners. But once your sales go over that £1,000 threshold—even by a small amount—you must inform HMRC and register for self-assessment.
It’s also important to figure out whether you’re actually “trading” in HMRC’s eyes. Selling a few old belongings on eBay or at a car boot sale probably doesn’t count. But if you’re regularly buying items to resell for profit—or making things specifically to sell—that’s a different story.
Got Income from Abroad?
Earning money from overseas, whether it’s a pension from sunny Spain, dividends from a foreign investment, or rent from that charming little flat in France, HMRC wants to know about it.
If you’re receiving income from abroad—be it from employment, property, savings, or investments—you’ll usually need to register for self-assessment and give HMRC the full picture.
The only exception? If your overseas income comes only from savings, investments, or property and it falls within specific tax-free limits, you might just escape the paperwork.
Made a capital gain?
If you sell something valuable and make a profit, there are specific rules about when you need to report it. Even if it’s not required, reporting it can sometimes work in your favour and so you should always check with an accountant.
Don’t Miss the Deadline: Notify HMRC by 5th October
If you need to notify HMRC and register for self-assessment, the deadline is the 5th of October following the end of the tax year. Miss it, and you could be in for some unwelcome penalties.
The good news? We’re here to take the stress off your shoulders and make sure you stay on HMRC’s good side—so you can focus on what you do best. Get in touch today, and let us handle the paperwork.
Lucy-Ella is a Chartered Accountant at Abac Chartered Accountants.
This article is for general information only. You are recommended to seek professional advice before taking action on the basis of the contents of this article.