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.
Since 6 April 2024, cash basis is the default way sole traders and partnerships work out taxable profit, and the old £150,000 turnover cap is gone. How it works, how it compares to accruals, who is excluded, and when to elect for traditional accounting instead.
The VAT registration threshold is £90,000 of taxable turnover, but a backward-looking 12-month test and a forward-looking 30-day test trigger it on different dates. Here are both tests, the exception for a temporary spike, the £88,000 deregistration line, and what registering late costs.
MTD requires a digital record of every transaction — three fields, kept in software, in place before each quarterly update. Here is what that means in practice, what still has to sit behind it, and where people get caught out.
The second MTD quarterly update is due 7 November 2026. Updates are cumulative, so it also covers anything Q1 missed. Here is what to reconcile before the final week, what to check in it, and what HMRC receives.
Landlords are half of the MTD population and have rules of their own — gross rents decide your threshold, joint owners are assessed individually, and jointly held property gets a concession on expenses.
A pro forma invoice is a preliminary bill you send before a sale is confirmed. It looks like an invoice, but HMRC treats it very differently: it is not a VAT invoice, it creates no tax point, and neither you nor your customer can use it to reclaim VAT.
Payments on account are two advance instalments towards next year's tax bill. In your first year they land on top of the balancing payment, so 31 January asks for 150% of the bill at once. Here is the maths, the £1,000 test, and how to reduce them safely.
Five dates govern your 2025/26 Self Assessment return. The next one is registration on 5 October 2026, and each date you miss after that carries its own penalty. Here is the full HMRC calendar, with the exact cost of missing each deadline.
The trading allowance gives you a flat £1,000 deduction instead of your actual costs. The crossover is exact and it does not depend on your income: below £1,000 of expenses the allowance wins, above it you lose money by taking it.
Most sole trader bookkeeping guides skip the most important concept: cash basis accounting. This guide covers what it means, what records HMRC requires, and how to build a system that takes 20 minutes a month instead of 10 hours in January.
HMRC explicitly lists bank statements as valid records for self-employed people, but they prove payment, not purpose. Here's when they're sufficient and when you still need the receipt.
HMRC accepts receipts, bank statements, invoices, and till rolls as valid proof of business expenses, but a valid receipt must show specific information, your retention obligation is five years (not six), and Making Tax Digital is changing how records must be kept.
