Self Assessment, Making Tax Digital, allowable expenses and tax planning for UK sole traders. Fixed monthly fees from £19.99 — no jargon, no surprises.
Not legally — but most sole traders save more in tax than they spend on accountancy fees. A specialist sole trader accountant maximises allowable expenses, files Self Assessment accurately, manages MTD compliance and advises on when incorporation makes sense — typically saving £1,000–£3,000 per year.
If you earn income personally and are not operating through a limited company, you are a sole trader. That means you are personally responsible for registering with HMRC, keeping records, filing tax returns and paying the right amount of tax at the right time.
AccTek supports self-employed professionals across every sector with practical tax advice, compliant filings and forward-looking business support:
Sole traders pay three types of tax on their business profits:
| Tax | Rate (2026/27) | When |
|---|---|---|
| Income Tax | 20% basic (£12,571–£50,270) 40% higher (£50,271–£125,140) 45% additional (£125,140+) | 31 January + payments on account |
| Class 2 NI | £3.45/week (if profits > £12,570) | Through Self Assessment |
| Class 4 NI | 6% (£12,570–£50,270) 2% (above £50,270) | Through Self Assessment |
HMRC collects tax in advance through “payments on account” — two instalments each equal to 50% of your previous year’s tax bill. This catches many first-year sole traders off guard. AccTek forecasts these payments so you are never surprised by a cash flow hit.
Every pound you claim as an allowable expense reduces your taxable profit — and therefore your income tax and National Insurance. Common sole trader expenses include:
AccTek reviews your expenses at onboarding and typically identifies £1,500–£4,000 in additional deductions that sole traders have been missing. That is £300–£1,600 in unnecessary tax — every year.
From April 2026, sole traders with qualifying income above £50,000 must comply with Making Tax Digital for Income Tax. The threshold drops to £30,000 from April 2027.
MTD replaces the annual Self Assessment return with:
AccTek handles the entire MTD process: registration, Xero setup, quarterly submissions and the Final Declaration. Your monthly fee covers everything — no additional charges for MTD compliance.
Even if you are below £50,000 now, the threshold drops to £30,000 in April 2027. Setting up digital bookkeeping now means you are ready when it applies — and you get real-time visibility into your finances in the meantime.
This is the most common question sole traders ask. The short answer: a limited company typically becomes more tax-efficient once net profits consistently exceed £30,000–£35,000 per year. Below that, the administrative overhead of a limited company outweighs the tax saving.
The full picture depends on:
AccTek models both structures with your actual numbers — not a generic calculator. See the full comparison: Sole Trader vs Limited Company 2026/27.
Not legally, but most sole traders save more in tax than they spend on accountancy fees. AccTek maximises allowable expenses, files Self Assessment accurately, manages MTD compliance and advises on when to incorporate — typically saving £1,000–£3,000 per year.
Sole traders pay income tax on profits above the £12,570 personal allowance (20% basic rate, 40% higher, 45% additional), Class 2 National Insurance (£3.45/week) and Class 4 National Insurance (6% on profits between £12,570 and £50,270, 2% above). All paid through Self Assessment.
Home office allowance, equipment, vehicle mileage (45p/mile), phone and internet, professional subscriptions, training, software, marketing, insurance, accountancy fees and stationery. Every pound claimed reduces your taxable profit and your tax bill.
A limited company typically becomes more tax-efficient once net profits consistently exceed £30,000–£35,000 per year. But pension position, IR35 risk, administrative overhead and growth plans must be factored in. AccTek models both structures with your actual numbers.
Yes, if self-employment income (or combined with rental income) exceeds £50,000 from April 2026, or £30,000 from April 2027. MTD requires quarterly digital submissions. AccTek handles registration, Xero setup and all HMRC submissions.
The online filing deadline is 31 January following the end of the tax year. Payments on account are due 31 January and 31 July. Late filing triggers an automatic £100 penalty. AccTek files every return well before the deadline.
Yes, if your self-employment income exceeds the £1,000 trading allowance in a tax year. You must register with HMRC by 5 October following the tax year in which you started trading. AccTek handles the registration process.
AccTek plans start from £19.99 per month fixed, including Self Assessment or MTD submissions, Xero bookkeeping, expense tracking and a dedicated accountant. The accountancy fee is itself an allowable business expense.
Self Assessment • MTD compliant • Expense maximisation • Fixed fees
Godwin Pinto ACA is a chartered accountant and founder of AccTek with 20+ years of experience accounting and tax for contractors, startup and SME .
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
