Being self-employed can be rewarding, but it also comes with important tax and record-keeping responsibilities. We help self-employed individuals, sole traders and freelancers stay compliant with HMRC and keep their accounts organised. ​

The Construction Industry Scheme (CIS) applies to contractors and subcontractors working in the UK construction industry, including sole traders and LTD companies.​ ​ Contractors may need to verify subcontractors, deduct CIS tax from payments, submit monthly CIS returns to HMRC and provide deduction statements. ​ Subcontractors may have CIS deducted from their income. These deductions are not the final tax bill, but they are used against their Income Tax and National Insurance liability. ​ Good CIS records are important. You should keep invoices, payment records, CIS deduction statements, subcontractor verification details and bank transactions. ​ Self-employed CIS subcontractors may also be affected by MTD ITSA, depending on their qualifying income. MTD ITSA does not mean paying tax every three months. It means keeping digital records and sending quarterly updates to HMRC using compatible software. ​ We can help with CIS registration, subcontractor verification, monthly CIS returns, CIS deduction records, Self Assessment tax returns, MTD ITSA preparation and filing, bookkeeping and Xero support.

VAT Registration Threshold You must register for VAT if your taxable turnover exceeds £90,000 in a rolling 12-month period. The threshold increased to £90,000 from April 2024. If your turnover is below this threshold, you can still register voluntarily. This can be beneficial in some cases, especially if you work with VAT-registered customers, but it may also add extra administration. ​ VAT Schemes Available Standard VAT Scheme – You charge VAT on sales, reclaim VAT on business purchases and usually submit VAT returns quarterly. ​ Flat Rate Scheme – You pay a fixed percentage of your VAT-inclusive turnover to HMRC. This can simplify accounting, but you may not be able to reclaim VAT on most purchases. Cash Accounting Scheme – You pay VAT to HMRC only when your customers pay you. This can help with cash flow. Annual Accounting Scheme – You make advance VAT payments during the year and submit one VAT return per year. ​ VAT Rates Standard Rate: 20% – most goods and services. Reduced Rate: 5% – some goods and services, for example children’s car seats and home energy. Zero Rate: 0% – zero-rated goods and services, for example most food and children’s clothes. Exempt Items: No VAT is charged, for example some financial services and education. ​ VAT Filing & Deadlines VAT returns are submitted online through Making Tax Digital (MTD) for VAT using compatible software such as Xero. ​ Filing is usually quarterly. The deadline is normally one month and seven days after the end of the VAT period. This is also usually the deadline for paying HMRC. ​ VAT and Self-Employment Self-employed individuals must register for VAT if their taxable turnover exceeds the VAT registration threshold. ​VAT can apply to both goods and services, including digital sales.

MTD ITSA starts from 6 April 2026 for self-employed individuals and landlords with qualifying income over £50,000. From 6 April 2027, the threshold will reduce to over £30,000. From 6 April 2028, the threshold will reduce again to over £20,000. If your self-employment and/or property income is £20,000 or less, MTD ITSA will not apply under the current rules.