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 (MTD) for VAT
- From April 2022, all VAT registeredbusinesses 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 Deregistersfor VAT.
Our Making VAT Digital Zone contains guides and updates including a Making VAT Digital (MVD) subscriber guide.
MTD for Income Tax
MTD for Income Tax is the second phase of digitising tax record keeping.
- From April 2024: individuals can once again volunteer to participate in the MTD for Income Tax pilotprogram (Re-opened April 2024).
- From April 2026: MTD for Income Tax will be mandated for self-employed businesses and landlords with turnover above £50,000.
- From: April 2027: MTD for Income Tax will be mandated for self-employed businesses and landlords with business turnover above £30,000.
- For businesses that commence on or after 6 April 2025, usually MTD will not start until 6 April following the tax year in which they commenced trading/business (see Digital start date).
- HMRC will review smaller businesses (with turnover of less than £30,000) to decide if they will be mandated to join MTD.
- No timetable has yet been introduced for partnerships
MTD for Corporation Tax
- HMRC have stated that MTD for corporation tax will not be mandated before April 2026.
