Completing the Self-Employment Pages of Your Tax Return

If you're self-employed, you must complete the self-employment pages of your Self Assessment tax return to report your business income and expenses. Getting this section right means calculating your taxable profit correctly and claiming all the deductions you're entitled to. This guide explains how to complete each part of these pages, which accounting methods you can use, and where to find specialist help if your situation is unusual.

Understanding your taxable profit

Your taxable profit is what you'll pay tax on — it's your total business income minus your allowable expenses. Allowable expenses are the running costs of your business that HMRC lets you deduct. These must be wholly and exclusively for business purposes.

When you complete your tax return, you add up all your allowable expenses for the tax year and enter the total amount in the relevant section. You don't need to send proof of your expenses when you submit your return, but you must keep records and receipts so you can show them to HMRC if they ask to see them.

Choosing your accounting method: cash basis or traditional accounting

If you're a sole trader or in a partnership without corporate partners, you can use cash basis to work out your income and expenses. Cash basis is simpler — you record income when money actually arrives in your bank account and expenses when you actually pay them. This method suits many small businesses because it's straightforward and matches how money moves through your business.

The alternative is traditional accounting (sometimes called accruals basis), where you record income when you invoice customers and expenses when you receive bills, regardless of when money changes hands.

What expenses can you claim?

You can deduct any costs that are allowable expenses. The key rule is that they must be business-related. When filling in your tax return, you'll enter the total for each category of expense in the relevant box.

You don't list individual expenses on the return itself — you just provide the totals. This is why keeping good records throughout the year is essential. If HMRC questions your figures later, you'll need to provide the detailed breakdown and evidence.

Claiming capital allowances

If you've bought assets for your business (such as equipment, machinery, or vehicles), you may be able to claim capital allowances. These are a way of getting tax relief on capital expenditure. Capital allowances and balancing charges have their own section on the self-employment pages.

Helpsheet HS252 explains how to calculate capital allowances and balancing charges if you need detailed guidance on this area.

If you run more than one business

You need to complete a separate set of self-employment pages for each business you run. Helpsheet HS220 provides information about how to handle your tax return when you have more than one business, including how to distinguish between different trades.

Calculating your taxable profits

Helpsheet HS222 guides you through calculating your taxable profits step by step. This is particularly useful if your situation is complex or if you're completing the pages for the first time and want to check you're doing it correctly.

Helpsheet HS229 explains how to extract the information you need from your business accounts to complete the tax return.

Dealing with trading losses

If your business made a loss rather than a profit, you may be able to claim relief for that loss. This could reduce your tax bill in other ways, such as by offsetting the loss against other income. Helpsheet HS227 covers how to claim relief for trading losses.

Specialist guidance for specific occupations

HMRC provides helpsheets for people in certain occupations where the rules differ slightly:

Farmers and market gardeners can refer to Helpsheet HS224 for reliefs and rules specific to agriculture, and Helpsheet HS232 for guidance on farm stock valuation.

Doctors should consult Helpsheet HS231 for guidance on calculating allowable expenses in medical practice.

Authors and artists may be able to use averaging tax relief to smooth out fluctuating income. Helpsheet HS234 explains how this works.

Foster carers, adult placement carers, kinship carers, and staying put carers can read Helpsheet HS236 about qualifying care relief, which may mean some or all of your income is tax-free.

Understanding basis period reform

Recent changes to how trading income is taxed mean the "basis period" rules have been reformed. HMRC has produced videos to help you understand how this affects your tax return, particularly if your business doesn't use a standard 5 April year end.

Other reliefs and considerations

There is a limit on how much Income Tax relief you can claim in certain circumstances. Helpsheet HS204 explains when this limit applies and how to calculate it.

You'll also need to consider your National Insurance contributions. Class 2 and Class 4 National Insurance contributions are calculated based on your self-employment profits, and there are sections on the tax return to record these.

Getting extra help

HMRC has created a playlist of YouTube videos specifically about self-employment. These cover topics including:

• Basic record keeping
• Cash basis and simplified expenses
• What expenses you can include
• Claiming motoring expenses
• Allowable expenses for business premises
• Other allowable business expenses
• Class 2 National Insurance contributions

There's also a recorded webinar that walks through the entire self-employment section of the online tax return, covering business turnover, expenses, capital allowances and balancing charges, losses, and tax deducted.

Sources

• Help with self-employment on your Self Assessment tax return
• Business expenses for the self-employed
• Cash basis for the self-employed
• More than one business (HS220)
• Farmers and market gardeners (HS224)
• Farm stock valuation (HS232)
• Doctors' expenses (HS231)
• Averaging for creators of literary or artistic works (HS234)
• Qualifying care relief (HS236)
• Limit on Income Tax reliefs (HS204)
• How to calculate your taxable profits (HS222)
• Losses (HS227)
• Information from your accounts (HS229)
• Capital allowances and balancing charges (HS252)

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.