As a limited company director, you’re almost certainly going to need to file a Self Assessment tax return by midnight on 31st January 2026, covering income earned during the 2024/25 tax year.
If you miss the deadline, you will incur an automatic £100 late filing penalty and unnecessary stress.
With this in mind, we’ve written a streamlined, up-to-date guide to help you file your return quickly, correctly, and stress-free.
1. Report your income, not your company’s
As a director, your limited company is a separate legal entity from its shareholders and directors.
Your personal tax return should only include your personal income, such as:
Salary paid via PAYE
Dividends declared by your company
Other income (e.g., rental income, interest, crypto gains, etc.)
Do not include any of your limited company’s income or expenses. These are handled separately in the corporation tax return.
2. Be prepared before you start
You will save yourself a lot of heartache if you gather all possible sources of data before you sit down to complete your tax return, including:
P60 or final payslip for salary
Dividend vouchers
Bank interest statements
Rental income details
Student loan repayment summaries
Pension contributions (if paid personally)
Any other sources of income which have not been taxed
Keep a dedicated folder (digital or physical) throughout the year to collect these documents as soon as you receive them, such as bank interest summaries.
3. Include the right figures
Even small omissions or mistakes can trigger HMRC queries. Make sure you double-check:
Student loan repayments made via PAYE
Tax code adjustments from HMRC coding notices
Benefits-in-kind (e.g., company car, health insurance)
Use software like FreeAgent, Xero, and even HMRC’s online system to minimise the risk of errors. These tools often auto-populate known data from your payroll or dividend records.
4. Know what not to include
Avoid adding tax-free items that can trigger unnecessary errors:
ISA interest – this is tax-free and should not appear on your return
Employer-handled pension contributions – don’t include contributions made through payroll (they’re already accounted for)
Company income or running costs – again, these are for the company’s tax return only
If you’re unsure what to include, consult with your accountant.
5. Don’t deduct the dividend allowance
Dividends can trip people up. Here’s what to watch out for:
Use tax year dates, not your company’s accounting period (i.e. include dividends declared and paid between 6 April 2024 and 5 April 2025).
Always report gross dividend amounts in full, even though the first £500 (2025/26 allowance) is taxed at 0%.
Tax bands for dividends (2025/26 tax year):
0% on the first £1,000
8.75% (basic rate)
33.75% (higher rate)
39.35% (additional rate)
Example: If you received £20,000 in dividends, declare £20,000. Don’t subtract the £500 allowance before entering it on the return.
6. Don’t wait until January to ask for help
If you’ve been contracting for a while, you’ll know that most accountants are swamped in January.
As a result, make sure you hire an accountant to help with your tax return well in advance of the January 31st deadline.
If you hire a contractor specialist, they will almost always offer a personal tax return service. This will either be ‘free’ (included in your company’s monthly fee) or you may need to pay a one-off charge of around £200 for the privilege.
7. Sign up to use HMRC’s Personal Tax Account service
If your tax bill (excluding PAYE) exceeds £1,000, HMRC may require payments on account for the following year. This means:
50% is due by 31 January (on top of any tax you owe for the previous tax year).
50% is due by 31 July.
This can catch new directors by surprise, so be sure to budget for it.
Example: If your tax bill for 2024/5 is £2,500, you might owe £3,750 in January 2026 (£2,500 + your first £1,250 payment on account), plus another £1,250 payment on account in July 2026.
9. Be aware of common pitfalls
Duplicate reporting of income (especially when mixing employment, dividends, and possible sole trader work)
Incorrect tax year entries (always report based on the 6 April to 5 April period)
Forgetting cryptocurrency or capital gains. HMRC has increased data matching with exchanges and property records
Misunderstanding pension tax relief – higher-rate relief must be claimed manually on your return
10. Make your life infinitely easier with online accounting software
Consider using MTD-compatible tax software like:
FreeAgent (easily the most popular choice for contractors)
Xero
TaxCalc
GoSimpleTax
These tools reduce manual errors, provide reminders, and offer real-time tax calculations.
Final Thoughts
Filing your Self Assessment doesn’t have to be a headache. With the right preparation and understanding of what to include, you can avoid penalties and stay on top of your finances.
If you don’t feel comfortable completing your own tax return, or your tax affairs are complex, consider paying an accountant a one-off fee to do it for you. But, don’t leave it until the last minute!
