Understanding Personal Tax Returns for Sole Traders in the UK

If you're a sole trader in the UK, filing a self-assessment tax return is part of the job. Right now, it’s done once a year, but that’s about to change.

Let’s break down what you need to know, what’s changing, and how to get ahead of it.

✅ What Is a Sole Trader?

A sole trader is a self-employed individual who runs their own business. You and your business are legally the same, so you're responsible for your profits, losses, and tax obligations.

You must register with HMRC if you earn more than £1,000 from self-employment in a tax year.

🧾 How Tax Returns Work (For Now)

Currently, sole traders submit a self-assessment tax return once a year, reporting:

Business income

Allowable expenses

Other sources of income (if applicable)

You pay tax only on profit (income minus business expenses), not your total turnover.

🧾 Claiming Expenses

To lower your tax bill, you can claim allowable business expenses like

Office supplies

Travel and fuel

Phone/internet (business use)

Marketing and software tools

Home office use (if applicable)

💡 Keep records and receipts—you'll need them for both HMRC and future MTD updates.

👥 How We Can Help

Getting used to quarterly submissions doesn’t have to be overwhelming.

✅ We’ll help you stay organised

✅ Track income and expenses accurately

✅ Submit updates on time, every time

✅ Make the transition to MTD stress-free

The sooner you start managing your finances like it’s already quarterly, the easier the shift will be.

Final Tip

The system is changing, and it’s coming fast.

Start the habit now. Get into the rhythm. And don’t do it alone.

Need help staying compliant and stress-free?

We’re here to support sole traders every step of the way.