In your first year as a freelancer, you will not pay tax until 31 January following the end of the tax year. If you start trading in April 2025, your first tax payment is not due until 31 January 2027. However, HMRC will also ask for a first payment on account at the same time, potentially doubling what you owe.

Budget from day one

Do not wait until January to start saving for tax. Set aside 25 to 30% of every payment you receive into a separate savings account. This will cover Income Tax, Class 4 NI, and the first payment on account.

Month-by-month timeline for a freelancer starting in April 2025

DateAction required
April 2025Start trading; begin keeping records of all income and expenses
5 October 2025Register for Self Assessment with HMRC if not already done
31 October 2025Paper Self Assessment filing deadline (for 2024/25 if applicable)
31 January 2026First payment on account for 2025/26 (50% of your 2024/25 bill, if applicable)
April 2026End of 2025/26 tax year; begin pulling together your records
31 July 2026Second payment on account for 2025/26
31 January 2027File 2025/26 return online; pay balancing payment and first payment on account for 2026/27

What your first January tax bill will include

Your first big payment in January will typically comprise two elements:

  • Balancing payment: The remaining tax owed for the just-ended tax year, after any payments already made
  • First payment on account: 50% of the current year's expected tax bill

For example, if your 2025/26 tax bill is £4,000, you will pay £4,000 + £2,000 (first payment on account) = £6,000 in January 2027, and a further £2,000 in July 2027.

How to file your Self Assessment return

1
Gather your records
Collect all invoices, bank statements, and expense receipts for the tax year ending 5 April.
2
Calculate your profit
Subtract your allowable business expenses from your total income to arrive at your taxable profit.
3
Log in to your HMRC account
Go to GOV.UK and log in to your Self Assessment account using your Government Gateway credentials.
4
Complete your return
Enter your income, expenses, and any other relevant information. HMRC will calculate your tax bill automatically.
5
Pay by 31 January
Pay online via bank transfer, debit card, or set up a Direct Debit through your HMRC account.

Can you reduce your payments on account?

Yes. If you expect your income to be lower in the next tax year, you can apply to reduce your payments on account by logging in to your HMRC account and submitting a claim. Be careful: if you underestimate and your actual tax bill is higher, HMRC will charge interest on the underpayment.

Disclaimer

This guide provides general information only and does not constitute financial, tax, or legal advice. For your specific situation, consult a qualified accountant. Find one via our accountant directory.