Being a sole trader is simple to set up, but the paperwork catches people out. A good accountant for sole traders in the UK saves time, reduces tax and keeps HMRC happy.
What does a sole trader accountant do?
They keep your books in cloud software such as Xero or QuickBooks, prepare your sole trader tax return, claim all allowable expenses, work out payments on account and advise when becoming a limited company might pay off.
What are the key Self Assessment dates?
- 5 October: register if you started trading in the previous tax year
- 31 January: online return, balancing payment and first payment on account
- 31 July: second payment on account
Missing 31 January brings an immediate £100 penalty, with more added over time.
How much tax does a sole trader pay?
You pay income tax on profit above the £12,570 personal allowance, plus Class 4 National Insurance at 6% on profits from £12,570 to £50,270 and 2% above that. Trading income of £1,000 or less may fall under the trading allowance.
What can sole traders claim as expenses?
Common claims include stock, software, advertising, insurance, professional fees, phone and internet costs, mileage (45p a mile for the first 10,000 business miles, then 25p) and a fair share of home office costs. Personal spending is not claimable.
How does Making Tax Digital affect sole traders?
It applies from April 2026 to qualifying income over £50,000, from April 2027 over £30,000 and from April 2028 over £20,000. You will need digital records and quarterly updates, which compatible software and an accountant handle.
FAQ
Do I need an accountant as a sole trader?
Not legally, but most find the fee pays for itself through missed expenses, correct filing and avoided penalties, especially as income grows.
How much does a sole trader accountant cost?
Fees depend on complexity. MyAccountico offers fixed monthly pricing so you can budget with confidence.
When should a sole trader become a limited company?
Often when profits comfortably exceed what you spend personally, but compare both structures before switching.
Is a sole trader the same as self-employed?
In everyday use, yes. You run the business personally and must register with HMRC.
Looking for an accountant for sole traders in the UK?
Book a free consultation or see our services.