Self-Assessment 2025/26: MTD, Foreign Income & Planning

Key takeaway: Self-assessment affects approximately 12 million taxpayers in the UK, and the 2025/26 returns due by 31 January 2027 will be the most varied in years: some clients are now in MTD ITSA and submit a final declaration rather than a traditional SA return; others have new income sources, changed circumstances, or first-year capital gains following rule changes. The practice that starts preparing in summer rather than leaving it to January is better placed to manage the workload, avoid errors, and give clients the planning advice they need while there is still time to act. BrightTax handles the full spectrum of self-assessment returns — from straightforward employment income to complex multi-source cases — giving practices a consistent workflow regardless of return complexity.

The self-assessment season has always been the defining pressure point of the tax year for UK practices. But in 2026, the workload is more varied than usual. MTD for Income Tax launched in April 2026 for the first cohort, meaning some clients now submit quarterly updates and a final declaration rather than a traditional self-assessment return. Others — the majority — remain on the standard SA process, but with new complexities: more capital gains events following the CGT rate changes in April 2026, non-dom clients navigating the new Foreign Income and Gains regime, and growing numbers of clients with rental income under the HMRC Let Property Campaign spotlight.

Starting the preparation process early — in June and July, not November and December — is the single most effective thing a practice can do to manage the January pressure.

Who Needs to File a Self-Assessment Return for 2025/26

Self-assessment is required for anyone who has income that has not been fully taxed at source, or who has specific circumstances that HMRC cannot handle through PAYE alone. The main triggers are: self-employment income (any amount); rental income above £2,500; income above £150,000; untaxed income above £2,500 (savings interest, dividends); capital gains above the Annual Exempt Amount; foreign income; Child Benefit where either partner earns above £60,000; and pensioners with complex income positions.

For 2025/26, some clients who have been on MTD ITSA from April 2026 will submit a final declaration rather than a traditional SA return. This is a formal step that confirms the year’s figures, brings in all non-business income sources (employment, savings, pensions), and calculates the final tax liability. The final declaration deadline is 31 January 2027 — the same as the traditional online SA return deadline.

Clients who are not yet in MTD ITSA — which is most clients for the 2025/26 year — file a standard online SA return as normal by 31 January 2027. Paper SA returns were due by 31 October 2026.

The Case for Starting Early

The practice that contacts clients in June or July to request records, accounts, and supporting information for the 2025/26 return has options: time to review, time to identify planning opportunities, and time to deal with complications. The practice that starts in December has none of these.

Summer and early autumn are particularly valuable for capital gains review. If a client has made or is planning a disposal — property, shares, a business interest — the tax liability can be modelled while there is still time to consider structuring options. Business Asset Disposal Relief, the interaction between CGT and income tax on the same-year profits, and the use of annual exempt amounts are all conversations best had before year-end, not after.

For clients with rental income, a review in the summer confirms whether there are outstanding income streams that need to appear on the return, whether loan interest restrictions under Section 24 have been correctly accounted for, and whether there is any exposure to HMRC’s Let Property Campaign. A planned voluntary disclosure, if needed, carries lower penalties than a prompted one.

How BrightTax Supports the Full Range of Returns

BrightTax handles self-assessment returns across the full spectrum of individual taxpayer types: employment-only returns, self-employment, partnership income, rental income, capital gains, foreign income and the FIG regime, trust income, and pension income. The software links directly to HMRC’s systems, pulling available income data from HMRC’s records to pre-populate returns and reduce manual data entry.

For MTD ITSA clients, BrightTax manages the final declaration — meaning the practice uses a single platform for the full year’s MTD and SA obligations without switching between systems. For clients not yet in MTD ITSA, BrightTax processes the standard SA return workflow.

BrightTax supports multiple-return workflows for practices managing high volumes: returns can be prepared in batches, reviewed and authorised within the practice, and submitted to HMRC directly from the system. The workflow tracks preparation and submission status across the full client list, making it straightforward to manage the January deadline without a manual status spreadsheet.

Practical Planning Points for Summer 2026

Client communication. Send a data request or tax questionnaire to all SA clients in July or August. The earlier clients respond, the more time there is for proper review. A structured questionnaire that asks about new income sources, disposals, property transactions, and changes in circumstances surfaces the complexity early.

CGT review. Review clients who have disposed of or are likely to dispose of assets in 2025/26. The CGT rates from April 2026 (18% basic rate, 24% higher rate, 18% BADR from April 2026) apply to disposals in the 2025/26 year. Ensure gains are correctly calculated and AEA has been properly applied.

Foreign income. For clients affected by the abolition of the non-dom regime and the introduction of the Foreign Income and Gains (FIG) regime, the 2025/26 return may include foreign income previously sheltered by the remittance basis. Early review allows time to identify what needs to be declared and at what rate.

Pension contributions. Review whether higher-earning clients have made sufficient pension contributions to reduce their adjusted net income below the Personal Allowance taper or the Child Benefit charge threshold. There is still time in summer to make contributions for 2025/26.

Frequently Asked Questions

When is the self-assessment deadline for 2025/26 returns?

Online self-assessment returns for the 2025/26 tax year must be submitted by 31 January 2027. Paper returns were due by 31 October 2026. For clients in MTD for Income Tax, the final declaration replaces the traditional SA return and is also due by 31 January.

Who does not need to file a self-assessment return?

Employees or pensioners whose income is fully taxed through PAYE, with no additional income sources above HMRC’s threshold, do not need to file a return. However, HMRC sometimes issues a Notice to File even where a return is not strictly required — once a Notice has been issued, a return must be submitted even if there is nothing to declare.

What changed for 2025/26 self-assessment returns compared to previous years?

The key changes for 2025/26 include: the introduction of MTD ITSA for the first cohort (income above £50,000), meaning those clients submit a final declaration rather than a standard SA return; the abolition of the non-dom regime and introduction of the FIG regime, affecting foreign income declarations; and CGT rate changes from April 2026 affecting disposals in the year.

How does BrightTax help practices manage the January self-assessment rush?

BrightTax supports batch preparation and review workflows, with return status tracking across the full client list. Returns can be prepared, reviewed internally, and submitted to HMRC without switching between systems.

Can self-assessment returns be amended after submission?

Yes. Submitted SA returns can be amended within 12 months of the original filing deadline — so 2025/26 returns can be amended up to 31 January 2028. HMRC’s systems allow online amendments within the 12-month window. After 12 months, any corrections require a formal overpayment relief claim.

BrightTax handles the full range of self-assessment returns — from straightforward employment cases to MTD ITSA final declarations and complex multi-source returns — with direct HMRC integration and batch workflow tools for practices managing high return volumes. Find out more about BrightTax or speak to your account manager.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.