Accountant for self-employed people and sole traders in Liverpool

You usually need a Self Assessment tax return if your self-employed income is over £1,000 in a tax year. That £1,000 is the trading allowance. Below it, you normally do not need to tell HMRC.

You must register by 5 October after the end of the first tax year you need a return for. If you started in, say, June 2026, that falls in the 2026/27 tax year, so you register by 5 October 2027. Our guide do I need to do a Self Assessment? covers the other situations where a return is needed.

You pay income tax and Class 4 National Insurance on your profit. Profit is your income minus allowable business expenses.

Say your profit is £30,000 and you have no other income. Income tax is 20% of £17,430 (£30,000 minus £12,570), which is £3,486. Class 4 is 6% of the same amount, which is £1,045.80. Your total is £4,531.80. Because your profit is over £7,105, Class 2 National Insurance is treated as paid, so you still build up State Pension without paying it. Scotland has different income tax bands. Try our self-employed tax calculator for your own figures.

You can claim costs you pay wholly and exclusively for the business. Common ones include:

• Stock, materials and tools
• Business use of a van or car, and fuel
• Phone, broadband and software
• Insurance, advertising and website costs
• Training linked to your current work
• Our accountancy fees
• A share of household bills if you work from home

Everyday clothing and your own meals during a normal working day are not allowable. We go through your costs with you each year so nothing is missed and nothing is claimed that should not be.

Some costs are partly business and partly personal, such as a car or phone you also use privately. You can only claim the business share. Keep a simple note of how you work out that share, for example a mileage log, so you can explain it if HMRC ever asks.

The online return and any tax due must be in by 31 January after the tax year ends. So the 2025/26 return is due on 31 January 2027. Most people also make payments on account, which are advance payments towards next year’s bill.

1. 1

   31 January

   File your return, pay the balance for last year and make your first payment on account for this year.

2. 2

   31 July

   Make your second payment on account. Each payment is usually half of last year’s bill.

3. 3

   Following 31 January

   Pay any balance left once the return shows the actual figure, and start the cycle again.

Making Tax Digital for Income Tax applies when your qualifying income, which is your turnover plus any gross rent before expenses, is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. You keep records in software and send quarterly updates, then file a final return by 31 January as now. HMRC writes to people who need to join. Penalty points for late quarterly updates are not applied in 2026/27, which gives you a year to settle in. Our Making Tax Digital service sets this up and handles it for you.

Our fixed fees for sole traders start from £99 a month, including your tax return and help through the year. You speak to the same two people every time, and one of them is an ICAEW Chartered Accountant. Book a free 20-minute chat and we send the exact price in writing within one working day. The price stays fixed for 12 months unless your business changes. See our fees. If your profits are growing, we can also look at whether a company would suit you better. Read sole trader vs limited company.