Our blog is where we share tips, guides, and insights to help freelancers and small business owners manage expenses, stay tax-ready, and grow their business.
Sole trader and self-employed get used as if they mean the same thing. In the UK, 'self-employed' is how HMRC taxes you and 'sole trader' is the simplest structure for your business. Here is how the two fit together, who else counts as self-employed, and the rules that follow.
A P11D reports the taxable benefits in kind an employer gives employees and directors, from company cars to private medical cover; the P11D(b) declares the Class 1A National Insurance owed. Covers each form, the 6 July deadline, the penalties, and the 2027 move to payroll reporting.
A P60 is the end-of-year certificate your employer must give you by 31 May, showing your total pay, tax and National Insurance for the tax year to 5 April. Here is what each box means, how it differs from a P45 and P11D, and which figures you copy onto a Self Assessment return.
Dividend tax is the Income Tax on dividends from company shares. For 2026/27 the basic and higher rates rose two percentage points. What the £500 allowance covers, how dividends stack on your salary, the current rates, and how to report them to HMRC.
A UK tax code is the short string HMRC gives your employer to work out how much Income Tax to take from your pay. Here is what each part means, how 1257L produces £12,570 of tax-free pay, what emergency codes do, and the steps to correct a code that is costing you money.
A sole trader's tax bill is Income Tax on profit plus Class 4 National Insurance on the same profit. Here is how it is worked out for 2026/27, with a full worked example, a table of what you owe at different profit levels, and the one lever that changes the number.
An invoice is a request for payment; a receipt confirms the money arrived. HMRC treats them differently: only VAT-registered businesses issue VAT invoices, a receipt proves you paid, and you keep both. How they differ, what each must legally show, and a worked example.
Your Personal Allowance sits on your main job, so a second income is usually taxed from the first pound. Here is how the UK taxes a second employed job and a self-employed side hustle for 2026/27: tax codes, the £1,000 trading allowance, and National Insurance worked out separately per job.
An SA302 is the tax calculation HMRC produces from your Self Assessment return, and it is what mortgage lenders ask self-employed applicants to prove their income. What it shows line by line, how to download it, and why lenders want the tax year overview alongside it.
Since 6 April 2024 most self-employed people no longer pay Class 2 National Insurance. Here is who is credited for free, who still needs to pay voluntarily, and the pension mistake that costs the most.
Under the Construction Industry Scheme a contractor withholds 20% or 30% of a subcontractor's labour as an advance on your tax. Why materials and plant hire are left out, how gross payment status removes the deduction, and how to reclaim through Self Assessment.
The VAT Flat Rate Scheme pays HMRC a fixed percentage of your VAT-inclusive turnover so you keep the difference, but the 16.5% limited-cost rate wiped out the gain for most labour-only businesses. The thresholds, the goods test, and two worked examples of when it saves money and when it costs you.
