Information for Sole Traders

Congratulations on making the decision to become self employed, and for learning about the new area of bookkeeping and tax. It is a bit scary for most people when you first start looking at this stuff, but if you have some one to

Register with HMRC as Self Employed

As ever with HMRC, rules change and new tax allowances become available. You need to ensure that you get information from a reliable up to date source. There are a few rules that have changed in the last few years, and people still share the old rules. This is what you need to know:

You will need to signup with HMRC once you have reached more than £1000 in sales (please note this is sales, not commission or profit). See the following video:

It’s really easy to do, just go to (or google “hmrc register as self employed”).

The deadline for registering is the October following the tax year you started your business. So if you started your business between 6 April 2020 and 5 April 2021, you have until October 2021 to register.

If you don’t register and you should have done, you could face a fine, so make sure you understand your obligations or discuss with a qualified professional to ensure you are doing the right thing.

Keep your Records Safe

Make sure you keep records (either electronically or paper) of all your sales and all your relevant business expenses. If you are unsure, keep it anyway!

While you don’t need to attach any paperwork to your return, you may need to prove your income and expenses to HMRC if they ever investigate you. You’ll need to keep them for 5 years following the submission deadline of the tax year the records relate to. So basically keep them for 6 years after the end of the tax year and you should be good!

If you keep your records electronically, make sure you have them backed up!

Know Your Deadlines

HMRC have deadlines for submitting your tax return and for payment of any taxes due. Make sure you have diarised those dates and don’t forget them! There are penalties due for late submissions and interest payable on late payments.

Understand the Rules

There is a lot to know about tax; personal allowance, trading allowance, mileage allowances, simplified expenses, the list goes on.

Everyone’s situation is different, so generic one size fits all advice doesn’t always work. If you have a particularly interesting tax situation, it may be worth paying for an hour of a tax accountant’s time, so you get more personalised advice.

That being said, if you know you have a fairly normal, uncomplicated tax situation, then you can get a lot of the information that you need from the internet, just be sure it comes from a reputable source (like this one!).


Free Support Facebook Group

You will find free resources, including a spreadsheet to download (at the moment you will need Microsoft Excel to use it – we are planning to move it across to Google Sheets to make it more accessible!). Go straight to the “Units” section in the group to find an introduction to the group and all the resources.

Buy the Book:

Please note, the Sole Trader Book has not yet been released but is available for pre-order.

All the information conveniently in one place as well as bookkeeping sheets at the back of the book if you are more comfortable with pen and paper than a spreadsheet! Buy through Amazon or direct from our website.