Tax tips for freelance creatives: meet the 31 January deadline stress-free

Have you seen the date? For months now, you’ve thought tax deadline day was ages away. Now it’s just a matter of days! Argh!!!!

Missing this deadline can result in hefty penalties, not just the immediate fine but also accumulating interest on unpaid tax. Yet, for creative freelancers juggling multiple projects and inconsistent incomes, the self-assessment process can feel overwhelming.

But don’t panic: there’s still time to get everything done in an orderly fashion. Just follow our step-by-step guide, and you’ll be able to meet the 2025 deadline without breaking a sweat.

1. Check if you need to self-assess

First of all, it’s worth checking if you need to file a self-assessment at all. That might sound dumb, but I once went through the whole rigmarole of completing a return, only to be told that I wasn’t considered freelance. That was back in the 1990s when HMRC decided that if you primarily freelanced for one company, you couldn’t be considered a freelancer. (Don’t think too badly of me: a similar thing happened to the Governor-General of the BBC.)

At the other end of the scale, there are people who think they don’t need to file a self-assessment because they “only earn a bit on the side”). Generally, you must self-assess if you earn more than £1,000 in revenue (not profit) from a side hustle, and even selling a few items on Etsy can add up to that.

Other triggers include earning over £150,000 annually, receiving untaxed income (such as dividends or rental income), generating significant interest outside tax-free accounts, or needing to repay child benefits due to high income.

If you’re unsure if you need to self-assess, use HMRC’s self-assessment eligibility checker to clarify your obligations.

2. Understand what you owe

One thing that surprises many freelancers is that the 31 January payment isn’t just about the previous year’s tax bill. It also includes the first ‘payment on account’ for the current tax year, typically 50% of your estimated annual liability.

The important thing is that payments on account apply unless your previous year’s tax bill was under £1,000 or if more than 80% of your tax is deducted at source. For detailed guidance, visit HMRC’s self-assessment page.

3. Gather your financial records

Effective record-keeping is the foundation of stress-free tax filing. So, before you get started filling in your self-assessment form, you’ll need to ensure all your invoices, receipts, and bank statements for the tax year are in order.

For the tech-savvy, digital tools like QuickBooks or FreeAgent can simplify the process, while for some, old-fashioned spreadsheets are easier to get your head around, even if it might take a little longer.

Either way, you need to do this work, even if you’re paying an accountant to complete your tax return. In general, accountants want to be paid for their expertise, not tedious legwork, especially this late in the day. (If you find one willing to just sift through a load of shoeboxes full of receipts, please let me know their details!)

Over the longer term, it’s a good idea to separate your personal and business finances by maintaining a dedicated bank account for each. This clarity will help you identify deductible expenses and streamline the preparation of your tax return.

4. Check for allowable expenses

Claiming allowable expenses is the most “fun” part of the tax return process, not least because it can significantly reduce your tax bill. But you’re not allowed to take the mickey.

For example, I plan to claim back the cost of the MacBook I bought recently because I use it entirely for my freelance work. However, I wouldn’t claim the cost of a TV, even though I write the odd article about TV shows, because I couldn’t honestly argue I use it solely for work.

There are some areas, however, where you can claim some expenses that you partly use for work. For instance, if you work from home, you’re allowed to claim an appropriate proportion of your electricity and heating costs.

In general, as a creative freelancer, you should be looking to deduct costs such as:

• Software subscriptions (such as the Adobe Creative Cloud).
• Home office expenses (including proportional utility costs).
• Travel expenses for work-related journeys.
• Professional development courses
• Fees for co-working spaces.

The important thing is not to overlook small expenses because they can really add up. HMRC provides a comprehensive list of allowable expenses to guide you.

5. Double-check your tax return

Accuracy is critical when filing your return, so double-check all your figures. Be rigorous in including all income sources, from freelance projects to royalties or other untaxed earnings, as well as all taxable expenses. Some of these are easy to forget, so it’s useful to go through all your bank and credit card statements line by line.

That might sound like obvious advice, but many don’t follow it and live to regret it. Mistakes can delay processing and lead to penalties. They can also, of course, mean you end up paying more tax than you need to. So consider using tax software or consulting an accountant if you’re unsure about any part of your return. A second pair of eyes can save you both money and stress.

6. Make the payment (or plan for it)

Paying your tax bill is fairly straightforward via HMRC’s online portal. You can use a debit card, direct debit, or bank transfer. That said, I’ve found on a number of occasions that paying my bill has been more complicated than it should have been. Sometimes, that was because the website didn’t make it clear how to make the payment. At other times, the payment was rejected by my bank for some weird reason. Often, the website was overloaded and not working properly due to overwhelming traffic that was close to the deadline.

With all that in mind, you should always aim to complete your tax return a few days before the official deadline. However, if you’re unable to pay the full amount, don’t panic. HMRC offers a Time To Pay arrangement to spread the cost over manageable instalments, although it will only do so if it’s satisfied you can keep up with the payments.

7. Avoid penalties and know your rights

Missing the 31 January deadline results in an automatic £100 fine, even if you don’t actually owe HMRC any tax. And that’s just the start.

Additional penalties include daily fines after three months and interest on unpaid taxes. So, even if you miss the deadline, it’s still important to complete your return as soon as possible. Also note that even if you can’t pay in full, filing your return helps to minimise penalties.

You can appeal if you have a valid excuse for not filling, such as illness or technical issues. And believe me, this can work: a family member successfully claimed back hundreds of pounds through this route. Success, of course, will vary on a case-by-case basis. For guidance on appealing, visit HMRC’s reasonable excuse criteria.

8. Prepare for the next tax year

Whatever happens in 2025, avoid repeating the January rush in 2026 by taking steps to prepare for the next tax year:

• Save 20-30% of your income for taxes.
• Use accounting software to track income and expenses throughout the year.
• Set regular reminders for tax-related tasks.
• Consider hiring an accountant if your finances are complex.

Ultimately, the 31 January deadline needn’t be a source of dread. By understanding your obligations, keeping organised records and leveraging available resources, you can confidently manage your taxes and focus on what you do best: being creative.

Start early, follow these steps, and you’ll navigate the self-assessment process stress-free, year after year.