7 sources of income you need to report via a Self Assessment tax return

If you need to file a Self Assessment tax return, you should make sure that you report all sources of taxable income, otherwise there can be serious consequences – especially if you deliberately conceal income.

Income, of course, is money that you’re paid for work you do or money that you’ve received from your assets, investments or things you’ve paid into. Usually, tax allowances can be claimed. Once all of your taxable income sources go over a threshold, it’s subject to Income Tax.

So, which sources of taxable income must you report via Self Assessment?

1. Employment

Leaving out earnings from a full-time or part-time job when reporting other income via Self Assessment is a surprisingly common mistake. But just because you’ve paid tax on that income doesn’t mean you can forget about it when completing your Self Assessment tax return. It’s also taken into account when HMRC works out how much Income Tax you owe on other sources of taxable income. Leave it out and you’re not giving an accurate picture of your total income, which can lead to problems.    

2. Self-employment

Each tax year, you can earn £1,000 of trading income tax-free (it’s called the trading allowance). If that’s all you’ve earned, perhaps from occasional casual work, and you’ve no other income, there’s no tax to pay and no Self Assessment tax return to file. Sole traders with gross income for a tax year of more than £1,000 must register for Self Assessment.

You summarise your total income and costs in your Self Assessment tax return (SA100) and supplementary self-employed page (SA103). Then you’ll be taxed on your profits, once any tax allowances and reliefs have been claimed. You’ll only pay tax if your taxable profits are more than the Personal Allowance (£12,570 for 2024/25).

3. Rental income

Similarly, thanks to the property allowance, you can earn up to £1,000 in a tax year in rental income from property or land. If you own property/land with others, you can each claim the £1,000 property allowance against your share of the gross rental income, providing that you do not claim “allowable expenses” (ie costs you pay to rent out the land or property).

You must notify HMRC if you have gross annual UK property income of £1,000 to £2,500; above £2,500 and you must register for Self Assessment and complete a Self Assessment tax return (SA100) plus supplementary page (SA105).

4. Savings interest

Interest you make on money you’ve deposited in a bank or building society can be taxable, so you may need to report it to HMRC via your Self Assessment tax return. However, if you earn relatively little interest and the rest of your income is relatively low, it may not be subject to tax.

How much tax you pay is determined by your Personal Allowance, the “starting rate for savings” (which can give you up to £5,000 of tax-free interest if you’re a low earner, but none if your other annual income is £17,570 or more) and the Personal Savings Allowance (£1,000 a year if you’re a basic rate Income Tax payer and £500 if you’re a higher rate Income Tax payer).

Need to know! Any savings you have in tax-free accounts such as ISAs and some National Savings and Investments accounts don’t count towards your Personal Savings Allowance.

5. Pension payments

Income Tax may be payable on pension payments if your total annual income is more than the Personal Allowance. That includes the State Pension, Additional State Pension, workplace or personal pension. You can usually take up to 25% of the amount you’ve paid into a private pension as a tax-free lump sum without it affecting your Personal Allowance.

6. Share dividend payments

Share dividend payments can also be taxable, which is why you may also need to report them via Self Assessment. However, you won’t pay any tax on dividend income if your total income doesn’t go over your Personal Allowance and you also get a dividend allowance worth £500 a year (2024/25). The tax you pay on dividends above the dividend allowance is determined by your Income Tax band. For basic rate payers it’s 8.75%; for higher rate payers it’s 33.75%; and for additional rate payers it’s 39.35%.

7. Capital Gains

Gains that you make from selling such assets as residential or commercial property, shares, businesses, etc can also be taxable. You may be able to claim for allowable costs via your Self Assessment Capital Gains Tax supplementary page (SA108), which can reduce your tax liability. The Capital Gains tax-free allowance is £3,000 (2024/25).

If you make a gain from selling property, you’ll either pay 18% Capital Gains Tax if you’re a basic-rate Income Tax payer or 28% if you pay a higher rate of Income Tax. Gains from selling other assets are charged at 10% for basic-rate taxpayers and 20% for higher-rate taxpayers. 

What if you don’t declare all your taxable income?

If you don’t tell HMRC about taxable income via Self Assessment before the required deadline, you may be charged a ‘failure to notify’ penalty, unless you have a reasonable excuse.

If it’s not deliberate, the penalty is usually up to 30% of the unpaid tax, plus, obviously, you must also pay the unpaid tax. If you’ve deliberately not told HMRC about taxable income, the penalty is between 20% and 70% (it’s less if you point it out rather than HMRC finding out). The highest penalty (50%-100%) is reserved for those who deliberately don’t report taxable income and try to conceal it.

GoSimpleTax is award-winning software that offers you an easier way to complete and file your Self Assessment tax return. And to ensure that your tax return is error-free and that you’re claiming all of your allowable expenses, why not get your Self Assessment tax return checked by one of our experts?

Blog content is for information purposes and over time may become outdated, although we do strive to keep it current. It's written to help you understand your Tax's and is not to be relied upon as professional accounting, tax and legal advice due to differences in everyone's circumstances. For additional help please contact our support team or HMRC.