Guides for sole traders
Plain answers to the questions Making Tax Digital raises, taken from GOV.UK. Each guide says when it was last checked, and links to the GOV.UK pages it relies on.
Making Tax Digital for Income Tax: who must sign up, and when
Who needs Making Tax Digital for Income Tax, the £50,000, £30,000 and £20,000 thresholds, and the date each one starts.
Checked against GOV.UK on 18 October 2026
Making Tax Digital software: what it must do and how to choose
What software for Making Tax Digital for Income Tax has to do, full software or bridging software for spreadsheets, what to check, and HMRC's software finder.
Checked against GOV.UK on 19 October 2026
Making Tax Digital quarterly update deadlines
The four quarterly update periods and deadlines for Making Tax Digital for Income Tax, standard and calendar, and what happens if you miss one.
Checked against GOV.UK on 18 October 2026
How much tax a sole trader pays: Income Tax and National Insurance
Income Tax and National Insurance on a sole trader's profits for 2026 to 2027 and 2025 to 2026: the rates, Scotland's bands, voluntary Class 2 and an example.
Checked against GOV.UK on 18 October 2026
Payments on account: what they are and when they're due
Two advance payments towards your next Self Assessment bill, due 31 January and 31 July: who pays them, how they're worked out, and how to reduce them.
Checked against GOV.UK on 15 October 2026
Allowable expenses for sole traders
What a sole trader can and cannot claim as an allowable expense, how to split a cost you also use privately, and the costs HMRC does not allow.
Checked against GOV.UK on 18 October 2026
The £1,000 trading allowance: when it applies and when to use it
Up to £1,000 a year of trading income tax-free: when you don't need to tell HMRC, when you must register anyway, and when claiming expenses is better.
Checked against GOV.UK on 15 October 2026
Cash basis or accruals: which should a sole trader use?
Cash basis has been the default for sole traders since 6 April 2024. What it means, who cannot use it, and when traditional (accruals) accounting might suit you better.
Checked against GOV.UK on 15 October 2026
HMRC exchange rates: turning foreign currency income into pounds
Which exchange rate a UK sole trader can use for euro or dollar income and costs, which date it belongs to, and a free calculator with HMRC's monthly rates.
Checked against GOV.UK on 15 October 2026
Invoicing in a foreign currency as a sole trader
Invoicing a client in euros or dollars as a UK sole trader: what the invoice must show, which figure counts for tax, the exchange rate to use, and VAT.
Checked against GOV.UK on 22 October 2026