If you work for yourself as a sole trader, your tax return — a Self Assessment — is how you tell HMRC what you earned and pay what you owe. It has a reputation for being stressful, but it’s straightforward once you know the steps. Here’s everything you need.
Do you need to file a sole trader tax return?
You must file a Self Assessment tax return if you earned more than £1,000 from self-employment in the tax year (6 April to 5 April). That £1,000 is the trading allowance — below it, you generally don’t need to register or file.
If you’re over the threshold, you need to:
- Register for Self Assessment with HMRC (by 5 October after the tax year you started trading)
- Get your Unique Taxpayer Reference (UTR)
- File your return and pay any tax by the deadline
The deadlines that matter
| What | Deadline |
|---|---|
| Register for Self Assessment | 5 October after your first trading year |
| Paper tax return | 31 October |
| Online tax return | 31 January |
| Pay the tax you owe | 31 January |
| First payment on account (if due) | 31 January |
| Second payment on account (if due) | 31 July |
The one almost everyone means by “the deadline” is 31 January — that’s when your online return and your payment are due. Miss it and there’s an automatic £100 penalty, even if you owe no tax.
How much tax will you pay?
As a sole trader, your profit (income minus allowable expenses) is taxed as your personal income:
- Income Tax: nothing on the first £12,570 (personal allowance), then 20% up to £50,270, 40% to £125,140, and 45% above
- Class 4 National Insurance: on profits above £12,570
- Class 2 National Insurance: generally treated as paid once your profits are above the threshold
There’s no separate “business tax” — it’s all personal. For a quick estimate of your bill, use our free sole trader tax calculator.
Claim every expense you’re entitled to
This is where many sole traders overpay. Every allowable expense reduces your taxable profit, and therefore your tax. Common ones include:
- Business travel and mileage
- Tools, equipment and software
- Use of home as an office
- Phone, internet and stationery
- Stock and materials
- Professional and accountancy fees
The test is that a cost must be “wholly and exclusively” for the business. Keeping clean records throughout the year — rather than digging through a shoebox in January — makes this painless, which is exactly what self-employed bookkeeping is for.
How to file your return
- Register with HMRC for Self Assessment and get your UTR
- Gather your figures — income, expenses, and any other income (employment, savings, etc.)
- Fill in the return online, including the self-employment pages
- Submit by 31 January and pay what you owe
From April 2026, Making Tax Digital for Income Tax starts to change this for higher-earning sole traders — requiring digital records and quarterly updates — so getting set up with software now is worth doing.
Avoiding the January panic
The stress of Self Assessment almost always comes from leaving it late and scrambling for figures. The fix is simple: keep records current through the year, know your number early, and set the tax aside as you go.
If you’d rather not think about it at all, our Self Assessment service prepares and files your return early with every expense claimed, and our accountants for the self-employed keep your books current so the return is a non-event.
Frequently asked questions
Do sole traders have to do a tax return?
When is the sole trader tax return deadline?
How much tax does a sole trader pay?
Do I need an accountant to file my tax return?
What expenses can a sole trader claim?
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Reviewed by Provense Accountants
Written and reviewed by our team of qualified accountants (AAT-regulated). This guide is general information, not personal tax advice — book a free consultation for advice on your situation.