Self Assessment basics for sole traders
Guide · Last checked: 21 October 2026 · Figures for the 2026 to 2027 tax year
If you work for yourself, you usually tell HMRC about your income through a Self Assessment tax return once a year. Here are the basics.
Do I need to send a tax return?
You usually do if you're self-employed as a sole trader. GOV.UK explains that the first £1,000 of self-employment income can be tax-free under the "trading allowance". Use the GOV.UK checker to be sure.
Key dates
- 5 October: tell HMRC you need to send a return (register for Self Assessment) if you haven't sent one before. The tax year runs from 6 April to 5 April.
- 31 October: deadline for paper returns.
- 31 January: deadline for online returns and for paying what you owe.
- 31 July: second payment deadline if you make "payments on account" towards next year's bill.
If your return is late, you get an immediate £100 penalty, and more if it's later still. See GOV.UK: Self Assessment penalties.
For the tax year that ended on 5 April 2026, the online return and payment are due by 11:59pm on 31 January 2027.
What you pay
- Income Tax on your profit (income minus allowable expenses), using the same bands as employees. In England, Wales and Northern Ireland that's 20% on taxable income from £12,571 to £50,270.
- Class 4 National Insurance: for 2026 to 2027, 6% on profits from £12,570 to £50,270, and 2% above that.
- Class 2 National Insurance: if your profits are £7,105 or more, it's treated as paid. Below that, you can choose to pay voluntarily (£3.65 a week in 2026 to 2027) to protect your National Insurance record.
Making Tax Digital for Income Tax
Sole traders with qualifying income over £50,000 should be using Making Tax Digital for Income Tax from 6 April 2026. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028. Use the GOV.UK checker to see if and when it applies to you.
Set money aside as you go
Tax isn't taken from your income automatically, so put some aside from every payment you get. In QuidsUp's Sole Trader tools, log your income and expenses and see a rough estimate of the tax and National Insurance to set aside each month, then send your accountant one tidy file.
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Sources
- GOV.UK: Self Assessment deadlines
- GOV.UK: Register for Self Assessment
- GOV.UK: Check if you need to send a tax return
- GOV.UK: Income Tax rates and allowances
- GOV.UK: Self-employed National Insurance rates
- GOV.UK: Making Tax Digital for Income Tax
This guide is general information, not tax advice. QuidsUp's tax figure is an estimate.