On a Self Assessment return, turnover is a before figure. It is your total business income for the tax year before any deductions for tax, National Insurance, or expenses. Whether turnover is before or after tax on Self Assessment is settled at the top of the SA103 self-employment pages: you enter the full amount your business took in, and the deductions come further down the form.
What HMRC Means by Turnover
Turnover is the raw total of everything your business earned between 6 April and 5 April. Every sale, fee, and payment counts, whether it came in by bank transfer, cash, card, or an online platform. Nothing is subtracted at this stage. If you invoiced a customer £500 for a job and spent £200 on materials to do it, your turnover from that job is £500, not £300.
Income tax on self-employment is charged on the profits of a trade under Part 2 of the Income Tax (Trading and Other Income) Act 2005, not on turnover directly.1legislation.gov.uk. Income Tax (Trading and Other Income) Act 2005 – Chapter 2 HMRC still needs the turnover figure though, because it is the starting point from which profit is worked out. A low profit against a high turnover is perfectly normal when you have genuine expenses. A high profit against a suspiciously low turnover is what draws questions.
Turnover Is Not What You Pay Tax On
The tax calculation happens on profit, not on turnover. Turnover is everything that came in. Taxable profit is what remains after you subtract allowable business expenses. Turnover of £50,000 with £10,000 of valid business costs gives a £40,000 profit, and that £40,000 is what income tax is charged on.2GOV.UK. Expenses if You’re Self-Employed
Allowable expenses have to be for business purposes. Personal spending does not count, even if the money left a business account. Where a cost is part business and part personal, only the business share is deductible. A £200 phone bill where £70 of use is business calls means you claim £70.2GOV.UK. Expenses if You’re Self-Employed
Class 4 National Insurance is worked out the same way, on taxable profit rather than gross sales.3GOV.UK. Self-Employed National Insurance Rates So the number you enter as turnover does not directly drive your bill. It sets the ceiling, and the expenses you enter next bring it down to the figure tax is actually charged on.
The Personal Allowance Sits Below Profit
Once profit is calculated, the personal allowance shelters the first slice from income tax. For 2026/27 the allowance is £12,570, so profit below that amount attracts no income tax.4House of Commons Library. Direct Taxes: Rates and Allowances The allowance tapers once total income passes £100,000 and disappears at £125,140. Self-employment profit counts toward that total alongside employment income, pensions, and savings interest.
Does Turnover Include VAT?
Whether VAT is inside your turnover figure depends on whether you are VAT-registered.
If you are not VAT-registered, there is no VAT in your prices, so turnover on the Self Assessment return is simply the total amount you charged customers.
If you are VAT-registered, you report turnover excluding the VAT you collected. That VAT belongs to HMRC and is dealt with on your separate VAT return, so putting it into your Self Assessment income would double-count it.
Registration is compulsory once taxable turnover exceeds £90,000 in any rolling 12-month period, a threshold that has held since April 2024 and continues through 2025/26 and 2026/27.5GOV.UK. Register for VAT: When to Register for VAT6House of Commons Library. VAT Registration HMRC looks at any rolling 12-month window, not just the tax year, so this needs continuous monitoring rather than an annual check.
Which Income Counts in Which Year
The accounting method you use decides which sales fall into your turnover for a given tax year.
Under the cash basis, you record income when the money reaches your bank account. Under traditional accrual accounting, you record income on the date you invoiced the customer, whether they have paid you yet or not.
The cash basis is the simpler option and is now the default for most sole traders. From the 2024/25 tax year, the old turnover cap on cash basis eligibility was removed, so businesses of any size can use it.7GOV.UK. Expanding the Cash Basis The previous £300,000 threshold no longer applies.
The choice can shift income between years. A large invoice raised in March but paid in May falls into 2025/26 turnover under accrual accounting but 2026/27 turnover under the cash basis. That timing matters if your income sits near a tax band or the VAT threshold.
Where Turnover Goes on the Form
Turnover is entered on the SA103 self-employment pages. There are two versions: the SA103S (short) for businesses with turnover below the VAT threshold, and the SA103F (full) for those above it.8GOV.UK. Self Assessment: Self-Employment (Short) (SA103S)
On the SA103S for 2025/26, turnover goes in Box 9. On the SA103F, it goes in Box 15. Both boxes are labelled “Your turnover — the takings, fees, sales or money earned by your business.”
Once you have entered turnover, the expenses boxes come next, and the system uses the difference to work out taxable profit. Filing online, the calculation runs automatically, and your final liability combines income tax on that profit with any Class 4 National Insurance due, minus the personal allowance and any other reliefs.
When You Do Not Need to Report Turnover at All
If your total self-employment income is £1,000 or less in the tax year, you do not need to report it. This is the trading allowance, and it applies automatically.9GOV.UK. Business Income Manual: Trading and Miscellaneous Income Allowance There is no need to register for Self Assessment or file a return for income at this level.
Above £1,000, you have two choices. You can take partial relief, which treats taxable profit as the amount above £1,000 with no separate expense claim. Or you can ignore the allowance and calculate profit the standard way by deducting your actual expenses.9GOV.UK. Business Income Manual: Trading and Miscellaneous Income Allowance The standard route usually gives a better result once your expenses exceed £1,000. The allowance cannot create a loss, so a loss-making business is better off with normal expense deduction to carry the loss forward.
Records That Support the Turnover Figure
An accurate turnover figure has to be backed by records of every business transaction: sales invoices, bank statements, and notes of any cash payments received. Under the cash basis, bank statements do most of the work because income is logged when received. Under accrual accounting, invoice dates matter more than deposit dates.2GOV.UK. Expenses if You’re Self-Employed
Records must be kept for at least five years after the 31 January submission deadline for the relevant tax year. For the 2025/26 return, due by 31 January 2027, that means keeping the paperwork until at least 31 January 2032.10GOV.UK. Self Assessment Tax Returns: Penalties These are the documents HMRC will ask for if it opens an inquiry into your return.