Self Assessment Tax Returns 2025/26: The Tips, Traps and Tax Savings You Need to Know

Income tax for self employed and landlords

Whether you're self employed, run a limited company, earn rental income, have a side hustle, or simply need to complete a tax return, the 2025/26 tax year brings a few changes that could catch people out.

At Attain Accountancy, we speak to business owners every day who worry they're missing something important, paying too much tax, or making mistakes that could lead to penalties.

The good news? Most Self Assessment issues can be avoided with a little planning and the right advice.

In this guide, we'll walk you through the biggest Self Assessment tips, common mistakes, tax-saving opportunities, and new rules for the 2025/26 tax year, all in plain English and without the tax jargon.

What Is Self Assessment?

Self Assessment is HMRC's system for collecting Income Tax from people whose tax isn't automatically deducted through PAYE.

You may need to complete a Self Assessment tax return if you:

• Are self-employed

• Are a company director

• Receive rental income

• Have foreign income

• Earn significant dividend income

• Receive untaxed income

• Need to claim tax reliefs

Many people assume Self Assessment only applies to sole traders, but that's no longer the case. More individuals are finding themselves caught within the Self Assessment system due to rising incomes and increasingly complex tax affairs.

Why More People Are Being Pulled Into Tax

One of the biggest issues affecting taxpayers right now is something called fiscal drag.

Don't worry about the fancy name.

It simply means that tax thresholds remain frozen while incomes increase.

The personal allowance remains frozen at £12,570, while wages, pensions and other income continue to rise. As a result, more people are paying tax for the first time, and many existing taxpayers are being pushed into higher tax bands.

You might feel like your salary hasn't increased dramatically, yet your tax bill has.

You're not imagining it.

This is becoming increasingly common and is something every taxpayer should keep an eye on.

The Biggest Tax Traps in 2025/26

There are several income levels where unexpected tax charges can arise.

The Child Benefit Trap (£60,000+)

If either parent has adjusted net income above £60,000, the High Income Child Benefit Charge begins to apply.

Many parents don't realise this until HMRC contacts them or they discover they should have been completing tax returns.

This can result in:

• Unexpected tax bills

• Penalties

• Interest charges

What can help?

Making pension contributions can reduce your adjusted income and potentially reduce the charge.

The £100,000 Income Trap

This is one of the most expensive tax traps in the UK.

Once your income exceeds £100,000, you begin to lose your personal allowance.

This creates an effective tax rate that can be significantly higher than many people expect.

You may also lose access to:

• Tax-Free Childcare

• Other childcare support schemes

Potential solution

Pension contributions and Gift Aid donations may help reduce adjusted income and preserve allowances.

This is one area where planning ahead can save thousands of pounds.

New Rules for Limited Company Directors

If you operate through a limited company, there's an important change for the 2025/26 tax year.

HMRC now requires additional information from directors of close companies when completing their Self Assessment returns.

You may need to report:

• Company name

• Company registration number

• Value of dividends received

• Percentage shareholding in the company There are also new declaration requirements within the tax return.

This change is particularly relevant for:

• Owner-managed businesses

• Family companies

• Small limited companies

If you're a director and your accountant usually prepares your tax return, ensure you're providing all requested information early.

HMRC may charge penalties where required information is omitted. The ATT guidance notes penalties of £60 per failure to provide required information.

Running a New Business? Don't Miss These New Reporting Requirements

Another change introduced for 2025/26 affects businesses that have started or ceased trading during the year.

New tax return boxes now require taxpayers to disclose business start and end dates. These boxes are mandatory.

That sounds simple, but it highlights the importance of keeping accurate records from day one.

Many business owners focus on sales first and paperwork later, but getting the basics right can prevent issues with HMRC down the road.

Self Assessment Mistakes We See All the Time

Nobody sets out to make mistakes on a tax return.

Unfortunately, some errors appear year after year.

Missing Income

Common examples include:

• Side hustles

• Online selling income

• Rental income

• Dividends

• Interest received

Even if HMRC already has some information, that doesn't automatically mean it shouldn't appear on your tax return.

Guessing Figures

One of the biggest mistakes taxpayers make is estimating expenditure without proper records.

If HMRC asks questions later, you'll need evidence to support the figures submitted.

Good bookkeeping isn't just for accountants.

It's your protection.

Forgetting Student Loans

Student loan repayments can create surprises at tax return time.

Many self-employed individuals forget these repayments are calculated as part of Self Assessment. [

This can result in a larger tax bill than expected.

A good accountant will forecast this in advance, helping you avoid nasty surprises in January.

Filing Too Late

Every year thousands of taxpayers leave their returns until January.

The result?

Stress.

Rushed calculations.

Missed information.

And sometimes penalties.

The earlier you deal with your tax return, the more opportunities you have to identify legitimate tax-saving opportunities.

Tax Refund Delays: Why They Happen

Everyone loves a tax refund.

Nobody loves waiting for one.

According to HMRC guidance discussed within ATT technical updates, repayments can be delayed for various reasons including inconsistencies between taxpayer records and submitted returns.

Common causes include:

• Incorrect address details

• Existing payment plans

• Outstanding tax liabilities elsewhere

• Additional verification checks  

If you're expecting a repayment, ensure all personal details are up to date before filing your return.

Winter Fuel Payment Changes

For older taxpayers, another area to watch is the treatment of Winter Fuel Payments.

For 2026/27, Winter Fuel Payments may be recovered where an individual's gross income exceeds £35,000. Recovery can take place through Self Assessment or PAYE

If you're affected, make sure your tax return information is accurate so any adjustment is calculated correctly.

Practical Tax-Saving Tips Before 5 April

While every situation is different, some commonly used strategies include:

Make Pension Contributions

Pension contributions may:

• Reduce taxable income

• Help retain Child Benefit

• Protect personal allowances

• Increase retirement savings

Use Gift Aid Correctly

Charitable donations made under Gift Aid can provide valuable tax relief.

Many taxpayers forget to claim this entirely.

Review Director Remuneration

If you run a limited company, taking the right balance of salary and dividends remains an important area of tax planning.

A quick review before the tax year ends can often produce savings.

Don't Ignore Small Income Sources

Your side hustle might feel insignificant today.

HMRC may see it differently.

Keeping proper records throughout the year will make your Self Assessment much easier and help avoid under-reporting.

Should You Complete Your Own Tax Return?

You can.

Many people do.

But Self Assessment is no longer as straightforward as it once was.

Today's tax returns often involve:

• Dividend income

• Student loans

• Child Benefit charges

• Director disclosures

• Rental income

• Pension planning

• Multiple income streams

A simple mistake can cost more than professional advice.

The right accountant doesn't just complete forms.

They help you understand your numbers, identify tax savings and give you peace of mind.

Final Thoughts

The 2025/26 tax year brings several important changes, particularly for company directors and those affected by frozen tax thresholds.

By planning early and keeping accurate records, you can reduce stress, avoid penalties and potentially save money.

And let's be honest, most business owners would much rather spend their time growing their business than worrying about tax returns.

Looking for help with your Self Assessment tax return in Surbiton, Kingston, New Malden, Thames Ditton or the surrounding areas?

At Attain Accountancy, we help sole traders, landlords, company directors and growing businesses navigate Self Assessment with confidence.

Whether you're based in Surbiton, Kingston, New Malden, Thames Ditton or further afield, we'd love to help.