To prepare your business for the January Self Assessment deadline, start gathering your records now, file your return early so you know exactly what you owe, and make sure you have the money ready to pay by 31 January. Leaving it until the last minute is one of the most common reasons sole traders and partners end up with penalties or cashflow problems in the new year.
When Is the Self Assessment Deadline?
For the 2025 to 2026 tax year, you must submit your online tax return and pay any tax you owe by 11:59pm on 31 January 2027. If you file a paper return, it must reach HMRC by 31 October 2026. You can check all the Self Assessment tax return deadlines on gov.uk.
If you miss a deadline, HMRC can charge penalties for filing late and interest on tax paid late, so it pays to plan ahead.
What Records Do I Need?
Before you start your return, gather everything you need for the tax year that ran from 6 April 2025 to 5 April 2026, including:
- Your sales invoices and business income
- Receipts for business expenses
- Business bank statements
- Details of any other income, such as rental income or dividends
- Records of pension contributions or charitable donations
Keeping your bookkeeping up to date throughout the year makes this much easier, and it also helps when lenders ask for evidence of your income. Read more in our guide: Can I Get a Business Loan If I Am Self-Employed?
Why Should I File My Return Early?
Filing early doesn’t mean you have to pay early, since the payment deadline stays the same. But it does mean you know exactly how much you owe weeks before it’s due, giving you time to plan. It also leaves room to sort out any problems, such as missing paperwork or questions about your figures, without the stress of a looming deadline.
What Are Payments on Account?
Payments on account catch many business owners out. If your last Self Assessment bill was £1,000 or more, you will usually need to make two advance payments on account towards next year’s tax, each worth half of last year’s bill. These are due on 31 January and 31 July.
This means your January payment can be much larger than you expect. If it’s your first year paying through Self Assessment, you may need to pay your full tax bill plus your first payment on account on the same day. If you expect your profits to fall, you can ask HMRC to reduce your payments on account, but you’ll be charged interest if you reduce them too far.
How Can I Make Sure I Can Afford My Tax Bill?
The simplest way is to set aside a percentage of your income in a separate savings account every time you are paid, so the money is there when you need it. Once you’ve filed your return, check your balance against your bill and plan for any shortfall well before 31 January.
January is also a quiet month for many businesses, after the costs of the Christmas period, so look at your cashflow as a whole rather than at your tax bill on its own.
What If I Can’t Pay My Self Assessment Bill in Full?
Don’t ignore it. If you cannot pay your tax bill on time, contact HMRC as early as possible. You may be able to set up a payment plan to pay in instalments, although interest will still be charged.
Another option is to borrow to pay HMRC on time. Loans for tax bills let you clear what you owe by the deadline and repay the lender over an agreed period. If you expect regular gaps between your income and your outgoings, a business credit line gives you funds to draw on when you need them, so you only pay interest on what you use.
See also: Working Capital Loans