Sole trader tax: a guide for the self-employed
In this guide, we look at the taxes the self-employed pay. We also look at some common mistakes to avoid when it comes to dealing with HMRC.
Tax & HMRC
Understanding how tax works is essential when you’re self-employed.
This section explains how the UK tax system applies to sole traders, including Income Tax, National Insurance, Self Assessment and VAT.
You’ll also find guidance on registering with HMRC, claiming allowances, meeting tax deadlines and preparing for Making Tax Digital.
Whether you’re starting out or checking that your tax affairs are in order, these guides explain the rules in plain English.
Start with these guides
Self Assessment and tax returns
Tax mistakes and common problems
Registering with HMRC
National Insurance and allowances
VAT and business taxes
Does a one-off large job count towards the VAT threshold?
A single large contract can push your taxable turnover over the VAT threshold. Here’s how the rules work, including the separate 30-day test.
What happens if you go over the VAT threshold by mistake?
If you accidentally go over the VAT threshold, you may need to register retrospectively and pay VAT from an earlier date. Here’s what to do next.
VAT for the self-employed – what you need to know
A practical guide to VAT for sole traders in 2026 – when to register, how it works, VAT returns, reclaiming expenses, and how to stay compliant with HMRC.
What National Insurance do self-employed people pay in 2026/27?
Find out how National Insurance works for sole traders, including Class 2/4 rates, how to pay, and how it differs from employee and limited company rules.
Why the VAT registration threshold is a problem for small businesses
The £90,000 VAT threshold often holds small businesses back. This guide explains why some avoid registering, and what the experts say.
How to check if a UK or EU VAT registration number is valid
If you have a new UK or EU customer or supplier, you should check the VAT registration number (VRN) they have supplied is valid. Here are three methods.
Can I pay myself a salary if I’m a sole trader?
Can pay yourself a salary as a sole trader? Learn how drawings work, what HMRC expects, and how to manage tax and NI when you’re self-employed.
How many years should you keep your tax and accounting records for?
How long sole traders, limited companies, employers and CIS businesses must keep tax records, plus the documents you should retain as per HMRC guidelines.
Can you charge VAT while waiting for your VAT number?
If you’ve applied for VAT registration but are still waiting for your VAT number, you may be unsure whether you should start charging VAT. In most cases, the answer is no. You should not issue a VAT invoice or show VAT as a separate charge until HMRC has confirmed your VAT registration number. However, there’s … Read more