You need to complete a Self Assessment tax return if you are self-employed and received a gross income of more than £1,000 in the tax year. This includes any money you earn that is cash in hand.
You may also have to complete Self Assessment if you have income from buying and selling (known as trading), providing services or other commercial activities. You only have to report this if your gross income before expenses is more than £1,000. If this is the case you must register for Self Assessment before the deadline of 5 October following the end of the tax year.
If you have more than one source of self-employment income, this should be completed on the self-employment pates of the tax return.
If you are self-employed as a subcontractor in the Construction Industry there are special rules you need to follow.
What counts as trading?
Selling a few personal possessions through a trading platform or at a car boot sale is different from regularly selling items that you have bought specifically to sell at a profit, or that you have made yourself to sell.
HMRC look for certain characteristics to decide whether a trade is being carried out. These include:
- whether you’re trying to make profit
- the number transactions and how often you make them
- the amount of time between the time you buy the goods then sell them
- how you got the goods
- how the sale is organised
You will only need to report income of over £1,000 from selling activity if it arises from a trade.
If your gross income from the activity exceeds £1,000 you will have to report your profit (gross income minus allowable expenses). You will be taxed on the profit, not the gross income.
The records you need.
You will need to report profit for the year ended on 5 April for your tax return. This is the only way to report profit.
If you started business after 6 April, the profit you include in your tax return will be for less than a year.
To calculate your profit, you will need a record of your income and allowable expenses. You can find guidance from HMRC on expenses if you’re self-employed and keeping records if you’re self-employed.
If your business turnover is less than the VAT registration threshold (£90,000 in 2025), then you will only need to report the total of:
- turnover
- expenses claimed
- net business profit
This should be completed on the self-employment page your tax return. More detail will be needed where the turnover is higher.