If you’re self-employed in the UK, knowing how much tax to put aside can prevent an unexpected HMRC bill from disrupting your finances. Unlike employees who usually have Income Tax and National Insurance deducted through…
Being self-employed gives you greater control over how you work, but it also means taking responsibility for reporting your income and paying the correct tax to HM Revenue & Customs. For many sole traders, freelancers…
Working for yourself gives you control over how you earn, but it also means taking responsibility for your own tax. Unlike an employee whose Income Tax and National Insurance are normally deducted automatically through PAYE,…
If you are self-employed in the UK, the amount of tax you pay depends mainly on your taxable business profit, not simply the amount of money customers pay you. For the 2026/27 tax year, running…
Yes. A sole trader can legally employ staff in the UK. Being self-employed does not mean you have to run the business alone. A sole trader can hire full-time employees, part-time workers, apprentices and other…
The difference between revenue and income is simple: revenue is the total money a business earns from sales or services. Income is what’s left after subtracting costs, taxes, and expenses. Revenue shows the top line;…
Turnover is the total income your business earns from sales before costs. Profit is what’s left after subtracting expenses, taxes, and other deductions. Turnover vs profit is one of the most misunderstood business topics. A…
Sole trader home expenses can include the business share of household costs, phone and broadband. You can calculate actual costs or use HMRC’s monthly flat rate for household running costs. Eligible fixed costs can be…
The £1,000 trading allowance can help UK sole traders, freelancers and people earning money from side hustles reduce their taxable income. Depending on how much you earn, the allowance could mean you pay no Income…
Sole trader mileage can be claimed using HMRC’s simplified expenses method. For 2026/27, eligible cars and vans qualify for 55p per business mile for the first 10,000 miles, then 25p. Motorcycles qualify for 24p. The…
A sole trader should consider becoming a limited company when managing business risk, retaining profits, attracting shareholders or meeting a client’s requirements justifies the extra cost and administration. There is no universal profit threshold that…
Sole trader vs limited company tax comparisons must include business taxes, personal taxes and National Insurance. Sole traders pay tax on business profits. Companies pay Corporation Tax, while owners may pay tax on salary and…
Running a successful business can bring an unexpected tax responsibility: VAT registration. If your sole trader business is growing, you need to monitor your turnover carefully. Once your taxable turnover exceeds the VAT registration threshold,…
Good bookkeeping gives sole traders a clear picture of their business finances, helps them claim legitimate tax deductions and makes completing their Self Assessment tax return considerably easier. Whether you are a self-employed consultant, tradesperson,…
You complete a £5,000 project in March but your customer does not pay until May. Should you include the £5,000 in your current tax return or wait until the money reaches your bank account? The…
