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Tax & HMRC

Understanding how tax works is essential if 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 guides covering common issues such as tax deadlines, penalties, record-keeping requirements, and the upcoming Making Tax Digital (MTD) rules.

Whether you’re just starting out or want to make sure you’re meeting HMRC’s requirements, these guides explain the key rules in plain English.

Start with these guides

  • What taxes do you pay if you work for yourself?
  • How does Self Assessment work if you’re self-employed?
  • What is Making Tax Digital (MTD) for Income Tax?
  • What is VAT and when do you have to register?
  • Use our sole trader tax calculator

Self Assessment and tax returns

  • Common Self Assessment mistakes
  • How long you must keep tax records
  • How to register for Making Tax Digital
  • MTD deadlines explained

National Insurance and allowances

  • National Insurance for the self-employed
  • The trading allowance explained
  • High income child benefit charge
  • Student loan repayments for the self-employed

VAT and business taxes

  • VAT threshold explained
  • VAT guide for small businesses
  • Flat Rate VAT scheme explained

Tax mistakes and common problems

  • Registered twice with HMRC?
  • HMRC interest rates on late tax payments
  • Business Asset Disposal Relief explained
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How the UK trading allowance works, who can use it, when to register with HMRC, and what changes with the new £3,000 threshold from 2027.
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Can I pay myself a salary if I’m a sole trader?

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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.
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Making Tax Digital for Income Tax: exemptions explained

July 18, 2025
A clear guide to who must follow MTD for Income Tax, who’s exempt, and the key easements available for sole traders and landlords.
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Self-employed? 31st July Payment on Account tax deadline looms

July 17, 2025
Payment on Account tax is due by 31 July. Learn who it applies to, how to pay, and what happens if you miss the deadline. Includes guides and links.
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VAT for the self-employed – what you need to know in 2025

July 1, 2025
A practical guide to VAT for sole traders in 2025 – when to register, how it works, VAT returns, reclaiming expenses, and how to stay compliant with HMRC.
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What National Insurance do self-employed people pay in 2025/26?

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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.
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Self-employed unprepared for Making Tax Digital for Income Tax (April 2026 deadline!)

April 8, 2025
With the April 2026 deadline approaching for MTD for Income Tax Self Assessment (ITSA), new research shows how unprepared the self employed are for the change.
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How tax works if you’re self-employed (2025/26)

April 3, 2025
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.
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How long should small businesses keep tax records for?

February 25, 2025
This concise guide explains which tax records small businesses (including self-employed and limited companies) should keep and for how long.
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If you make some extra money via a 'side hustle' - by selling online - you should be aware that digital platforms now share information about sellers with HMRC. You might need to pay tax on any profits you make - but it depends!
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