Accountants for sole traders and the self-employed
We keep your books current, tell you what to set aside for tax as you earn it, check every relief and finish your Self Assessment return long before January, for a fixed monthly fee from £29 + VAT.
Your first January bill
- Income tax and Class 4 National Insurance
- £8,432
- First payment on account for next year
- £4,216
- Due on 31 January 2028
- £12,648
- Then on 31 July 2028
- £4,216
Your first full year of self-employment, 2026/27 rates, no other income. No payment on account is asked for when the year’s bill is under £1,000.
Payments on account in your first profitable year
Take a £45,000 profit in the year to 5 April 2027. The tax for it, and half of it again towards next year, is due on one day.
£8,432
Income tax £6,486 and Class 4 National Insurance £1,946 for 2026/27. Class 2 is treated as paid.
£4,216 + £4,216
Next year’s tax paid early, in two halves on 31 January and 31 July. The jump happens in the first profitable year, so plan for it.
£16,864
Paid in seven months, against a year in which you owed £8,432.
Worked through at 2026/27 rates from our own calculators, which follow gov.uk guidance checked in July 2026. This is an example and your figures will differ.
Paying your own tax as a sole trader
If you have only ever been employed, the main change is that nothing is taken off before the money arrives. Every payment that lands is gross, some of it is already owed in tax, and there is no payslip telling you which part.
The January bill catches people out after a good year, because the money was spent while it sat in the same account as everything else.
The answer is a second account, a fixed percentage moved the day each payment lands, and books current enough to tell you what the percentage should be. Most of what we do for a sole trader is make that automatic.
Five common sole trader tax mistakes
One bank account for everything
Legal for a sole trader, but every line then has to be judged rather than coded, which is slower, dearer and less accurate, and it makes an HMRC enquiry longer.
Nothing set aside
The tax bill is a share of money you have already been paid. If it is not moved out as it is earned, the January payment has to come out of whatever cash is left.
Reliefs left unclaimed
Use of home, mileage, pre-trading costs in the seven years before you started, capital allowances on equipment, pension contributions, losses carried forward. Reliefs are not claimed automatically and a return prepared from a bank total will miss most of them.
Leaving it to January
A return prepared in the last fortnight uses whatever records can be found in time, and the figure can no longer be changed because the tax year closed nine months earlier.
Not being ready for Making Tax Digital
From 6 April 2026 sole traders with qualifying income over £50,000 keep digital records and file quarterly. The year to move onto software is the one before that starts. Our Making Tax Digital checker tells you which year catches you.
Six tax dates for sole traders
All of these dates are fixed except VAT registration, which depends on your turnover.
6
April
The tax year starts. Income from this date belongs to the new year’s return.
5
October
Register for Self Assessment if this is your first year.
31
October
Paper return deadline.
31
January
Online return, the balancing payment and your first payment on account, all due the same day.
31
July
Second payment on account.
30
days
Cross £90,000 of rolling turnover and you must register for VAT within 30 days.
Source: gov.uk Self Assessment and VAT deadline guidance, checked July 2026. See key tax dates.
What we do for sole traders every year
Through the year
Books kept current
Bank feed, receipts from your phone, a monthly reconciliation.
A running tax figure
What you owe as it builds, so the set-aside percentage comes from your own figures.
MTD, handled
Digital records and the quarterly updates from the year it applies to you.
Once a year
The return, early
Prepared from real records and finished long before January, with the figure and the dates in writing.
Every relief checked
Including costs from before you started trading.
The incorporation conversation
Modelled on your numbers once your profit reaches the point where a company might save tax.
What people ask us
How much does it cost for a sole trader?
Accounts and your Self Assessment return start at £29 + VAT a month. The fee rises with turnover, VAT returns are included once you are registered, and payroll is added from £25 + VAT a month if anyone works for you. The instant quote shows your monthly fee in four questions, and the fee is fixed once agreed. FreeAgent is included, worth up to £330 a year, and questions are covered by the monthly fee.
Do I actually need an accountant, or can I file it myself?
Plenty of sole traders file their own return perfectly well, and if your income is one stream, your expenses are a short list and you are comfortable with the rules, you probably do not need us yet. An accountant earns the fee when there is a real decision inside the numbers: whether to incorporate, when to register for VAT, how to treat a vehicle, what to do about a year where profit jumped. Those get expensive to unpick afterwards. If you cannot name your taxable profit and your next payment on account without looking, an accountant will help.
When do I have to register, and what does it cost if I am late?
By 5 October following the end of the tax year in which your self-employed income passed the £1,000 trading allowance. Registration gets you a Unique Taxpayer Reference, which takes time to arrive, so register well before the deadline. Filing late brings an automatic £100 penalty even where no tax is due, then daily penalties and percentage charges as it drags on, plus interest on anything unpaid. Paying late is charged separately from filing late. If you are already behind, tell us how far and we will work out exactly what is outstanding before quoting the catch-up.
Should I be a limited company instead?
Possibly. The tax difference at modest profit levels is far smaller than it used to be once Corporation Tax, dividend rates and the extra admin are counted, and incorporating brings public accounts, a separate bank account, payroll and filings that did not exist before. It usually starts to make sense when profits are consistently above what you need to draw, because retained profit is taxed once rather than as personal income. The right answer needs your actual figures and your plans for the next two years. Read sole trader or limited company, then ask us.
Does Making Tax Digital affect me, and from when?
Yes, on a phased timetable set by your qualifying income: gross income from self-employment and property combined, before expenses, taken from your Self Assessment return. April 2026 for over £50,000, April 2027 for over £30,000 and April 2028 for over £20,000. From your date you send four quarterly updates plus an End of Period Statement and Final Declaration instead of one return. It does not change how much tax you owe, only how often you report. FreeAgent is included in your package and is HMRC-recognised for it, so the practical change is keeping records current through the year. See the MTD guide.
What can I actually claim as an expense?
Costs incurred wholly and exclusively for the business. Where something is used privately as well, such as a phone, a car or a room at home, you claim the business proportion, and you need a defensible basis for the split. Everyday clothing is not allowable even if you only wear it for work; protective gear and genuine uniforms are. For a vehicle you choose between a flat rate per business mile and the business share of actual running costs, and you generally stay with that method for that vehicle. Keep the records digitally as you go. Under MTD they have to be digital anyway, and receipts reconstructed in January are often missed.
Can you help if I have not filed for a couple of years?
Yes. The first job is finding out precisely what is outstanding: which years, which returns, what HMRC has already assessed or charged. The letters people receive rarely give the full picture. Then we agree an order, usually oldest first, to stop penalties and interest compounding while we work. Where the amount owed is genuinely unaffordable, a Time to Pay arrangement with HMRC is a real option and is far easier to agree before enforcement starts. Catch-up work is quoted separately from the monthly fee because it is a one-off project with its own scope.
Is FreeAgent included, and can I keep it if I leave?
It is included at no extra cost while you are a client, worth up to £330 a year against subscribing yourself. If you leave, the licence provided through us stops, but the data is yours: you can take a full export, or move the subscription into your own name and carry on in the same file. Your records stay available to you even if an invoice is disputed. Software bundled into a fee costs less than paying separately, and the licence is tied to the relationship.
Anything else, book a free call.
From £29
See your monthly fee in four questions
£29 + VAT a month covers your accounts and Self Assessment return. Your name and email come last, to send the proposal.
Call or WhatsApp 07476 989568 or email hello@buzzaccounting.co.uk
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