Self Assessment for Freelancers Using Online Platforms as Sole Traders

If you work as a freelancer through online platforms (such as selling services or goods via apps or websites) and operate as a sole trader in the UK, you will generally need to complete a Self Assessment tax return to report your income to HM Revenue and Customs (HMRC).

When You Need to Complete a Self Assessment Tax Return

HMRC uses Self Assessment to collect Income Tax from people whose income isn’t taxed at source, including sole traders. If you earn money as a freelancer through online platforms, this income usually counts as self-employed income. You must send a tax return if HMRC asks you to, or if you have income that is not taxed automatically through PAYE.

You must register for Self Assessment by 5 October following the end of the tax year in which you started trading or when you first have a tax liability not collected through PAYE. For example, if you began freelancing in the 2023 to 2024 tax year (which ends on 5 April 2024), you need to register by 5 October 2024.

Keeping Records

It is important to keep accurate records of all your income and expenses related to your freelance work. This includes:

• Payments received through online platforms
• Invoices and receipts
• Bank statements showing income and business expenses

These records help you complete your tax return accurately and support your figures if HMRC asks for evidence.

Filing Your Tax Return

You can file your Self Assessment tax return online, which is the most common method. If you prefer, you can request a paper form (SA100) from HMRC, but online filing is generally faster and more convenient.

The tax return covers your income and expenses for the tax year, which runs from 6 April to 5 April the following year. You report your total income from freelancing and any other sources, deduct allowable business expenses, and HMRC calculates the tax you owe.

Deadlines and Payments

You must submit your completed tax return by 31 January following the end of the tax year. For example, for the 2023 to 2024 tax year, the deadline is 31 January 2025. If you miss this deadline, HMRC may charge penalties and interest.

Your tax bill, based on your Self Assessment, is also due by 31 January. If you expect to owe more than £1,000 in tax, you may need to make payments on account towards the next year’s tax bill.

Exceptions and Additional Points

• Not all income below a certain threshold means you can avoid filing a return; if HMRC requests one, you must comply.
• The trading allowance (a £1,000 tax exemption on small amounts of trading income) may apply. You can choose to deduct this allowance instead of your actual business expenses if it results in a lower taxable profit. However, if your allowable expenses are less than £1,000, claiming the trading allowance may be simpler but does not necessarily reduce your taxable profit compared to deducting expenses.
• If you have other income sources, such as employment or property income, you must include these in your Self Assessment return.

For detailed guidance on registering, filing, and paying, always check the official HMRC Self Assessment pages or contact HMRC directly.

Official reference: https://www.gov.uk/self-assessment-tax-returns. Always check the latest official guidance. Related forms: Browse our form category.

Important: This article provides general information. Government rules, forms and procedures can change, and this article may not reflect the latest updates. Check current GOV.UK guidance or the relevant authority before relying on it. ITG & Co. is independent and is not affiliated with a government department.