What you need to know
about the tax.
Practical UK tax guidance for freelancers and self-employed professionals — AI-drafted from HMRC guidance, checked by a person before it goes up. How we write these. 119 articles, page 1 of 5.
Do you still file a Self Assessment under Making Tax Digital?
Yes, but it changes. Under MTD for Income Tax, you replace the annual SA return with quarterly updates plus a final declaration each year.
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Do you still file a Self Assessment return under MTD?
No. Under Making Tax Digital for Income Tax, the annual Self Assessment return is replaced by quarterly updates plus a final declaration.
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Do You Still File a Self Assessment Under MTD?
Yes, but the annual return is replaced by an End of Period Statement and a Final Declaration — not a traditional SA return.
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Can you opt out of MTD? Exemption from Making Tax Digital
You cannot opt out of MTD for Income Tax if you meet the £50,000 threshold. You can only apply for exemption on specific grounds.
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What counts as qualifying income for Making Tax Digital?
Qualifying income for MTD for Income Tax means gross income from self-employment and/or property before expenses — not your taxable profit.
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VAT Threshold Planning: Register Early or Wait for £90,000?
The VAT registration threshold sits at £90,000 for 2024/25 and 2025/26, but breaching it isn't the only reason to register. This guide helps UK freelancers and sole traders decide whether voluntary early registration could actually save them money — or cost them clients.
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Cash Basis & MTD ITSA: Invoice Date vs Payment Date Explained
Under Making Tax Digital for Income Tax Self Assessment, cash basis sole traders must record income when money actually lands in their account — not when they raise an invoice. Getting this wrong could mean misreporting quarterly figures to HMRC. Here's exactly what you need to know.
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Mileage Claims for Limited Company Directors: AMAP vs Salary
If you use your personal car for business travel, claiming mileage through your limited company is one of the most tax-efficient strategies available. Using the HMRC Approved Mileage Allowance Payment (AMAP) rate means neither you nor your company pays tax or National Insurance on those payments. Here's exactly how it works and why it beats taking extra salary.
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Adjusted Profit Calculations: Mistakes That Cost Directors Thousands
Getting your adjusted profit calculation wrong for Corporation Tax doesn't just mean paying the wrong amount — it usually means overpaying. Here are the most common errors limited company directors make and exactly how to fix them.
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Reasonable Excuse for Late Tax Returns: How to Appeal HMRC Penalties
Filed your Self Assessment return late and received an HMRC penalty? You may be able to have it cancelled if you have a reasonable excuse. Here is exactly what qualifies, what does not, and how to make a successful appeal.
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Trading Allowance for Sole Traders: Claim It or Use Actual Expenses?
The £1,000 trading allowance can simplify your tax return as a sole trader, but it is not always the best choice. Understanding when to claim it versus deducting actual expenses could save you a significant amount of tax. Here is how to decide what works best for your situation.
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VAT Partial Exemption: How to Calculate Your Recoverable Input Tax
If your business makes both taxable and exempt supplies, you can't reclaim all your VAT on costs — but you don't have to lose it all either. Partial exemption rules let you recover a fair proportion of your input tax, and getting the calculation right is essential. Here's exactly how to do it.
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Capital Allowances on Plant & Machinery: AIA vs First Year Allowances
Claiming capital allowances correctly can dramatically reduce your limited company's tax bill. This guide breaks down the Annual Investment Allowance and First Year Allowances, explaining when to use each and how to maximise your relief on plant and machinery purchases.
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Home Office Expenses for Sole Traders: Flat Rate vs Actual Costs
If you work from home as a sole trader, HMRC lets you claim a portion of your household bills as a business expense. You can choose between a simple flat rate method or calculating your actual costs using square footage. This guide explains both approaches so you can pick the one that saves you the most tax.
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Statutory Work in Progress: What Limited Companies Must Know
If your limited company has incomplete projects at your year-end, you may be required to include their value on your balance sheet as work in progress. Getting this right affects both your corporation tax bill and the accuracy of your statutory accounts. Here is what every limited company director needs to understand.
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Multiple Business Activities in Your Limited Company: Splitting Income & Costs
Running more than one type of business through your limited company can create real headaches at tax time. Understanding how to correctly apportion income and expenses between activities protects you from HMRC scrutiny and ensures you claim exactly what you're entitled to. Here's what directors need to know.
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Mixed-Use Property Relief: Reclaiming VAT on Part-Business Premises
If you run your business from a property that also serves as your home, you may be able to reclaim a portion of VAT on related costs. This guide explains how mixed-use VAT recovery works for sole traders and freelancers, what HMRC expects, and how to calculate your claim accurately.
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Diverted Profits Tax: Is HMRC Looking at Your Company?
Diverted Profits Tax targets companies that shift profits away from the UK using artificial arrangements. While DPT was originally aimed at multinationals, growing scrutiny means UK-connected limited companies with cross-border structures need to understand the rules. Here is what directors need to know in 2026.
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Spouse Salary Planning: Cut Tax and NI in Your Limited Company
Paying your spouse or civil partner a salary through your limited company is one of the most effective and legitimate ways to reduce your overall tax bill. Done correctly, it spreads income across two personal allowances and minimises National Insurance costs. This guide explains exactly how to structure it for the 2026/27 tax year.
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Basis Periods for New Sole Traders: Your First Tax Bill Explained
Starting out as a sole trader means navigating HMRC's rules on basis periods — the time frame used to calculate which profits are taxed and when. Under the new tax year basis rules that took full effect from 2024/25, things work differently to how they did before. Here is exactly what you need to know about your first year's tax bill.
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MTD ITSA Penalties: What Sole Traders Need to Know in 2026
Making Tax Digital for Income Tax Self Assessment has brought a new penalty regime that catches many sole traders off guard. Understanding how late filing and late payment penalties work under MTD ITSA is essential to protecting your cash flow. Here is exactly what you need to know.
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Trading Losses: Carry-Back vs Carry-Forward — Which Suits You?
When your business makes a loss, HMRC gives you choices about how to use it — and the right choice can mean thousands of pounds back in your pocket. This guide breaks down carry-back and carry-forward strategies for sole traders and limited company directors, so you can make the most tax-efficient decision for your situation.
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VAT Return Deadlines: Penalties, Surcharges & How to Appeal
Missing a VAT return deadline can trigger automatic penalties under HMRC's points-based system, introduced in January 2023. Whether you're a sole trader or limited company director, understanding how these penalties work — and how to challenge them — could save you significant money. Here's what you need to know.
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Cash Basis vs Accruals: When Does a Late Invoice Count as Income?
If a client pays your invoice three months late, do you declare that income in the tax year you raised the invoice or the year you received the money? The answer depends on which accounting method you use — and getting it wrong can land you with an unexpected tax bill. Here is exactly how the rules work for sole traders and freelancers under Self Assessment.
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