This section covers the tax rules for self-employed individuals, or "sole traders". These are people who trade on their own through an unincorporated business.
These rules also apply to partners in partnerships, but partnership law is a separate issue, and partnerships can have different treatment when it comes to taxing profits and losses.
This section is for sole traders and is full of tax planning guides and tips & tools together with tax compliance checklists and our regular CPD updates.
Different tax rules apply for different types of expense. These guides summarise the rules, advise you on planning points and tax-traps and with worked examples illustrate what you can and can't claim.
How are different types of business taxed? What special rules apply to different types of business income and expenses? What about VAT? We summarise the different rules for taxing income and expenses of a large selection of different trades, professions and vocations.
Making Tax Digital for Income Tax Self Assessment (MTD for ITSA)
MTD for ITSA is the second phase of digitising tax record-keeping. It applies to self-employed individuals and landlords. HMRC's MTD for ITSA pilot program re-opened April 2024.
MTD for ITSA will apply for self-employed businesses and landlords from:
- 6 April 2026, where turnover is above £50,000.
- 6 April 2027, where turnover is above £30,000.
- 6 April 2028, where turnover is above £20,000.
The Government is continuing to review the position for self-employed businesses and landlords with turnover below £20,000.
Making Tax Digital (MTD) for VAT
- From April 2022, all VAT-registered businesses must retain digital records and submit their VAT returns to HMRC using 'functional compatible software', unless an exemption such as digital exclusion applies.
- Once in MTD for VAT, a business remains in MTD for VAT unless it deregisters for VAT.
Our Making VAT Digital Zone contains guides and updates.