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.
What is Self-Employment?
Self-employment means working for yourself rather than being employed by an organisation. This includes sole traders, freelancers and business partners.
If you are self-employed, you are responsible for reporting your income, claiming allowable business expenses and paying any tax and National Insurance due.
Self Assessment Tax Returns
Most self-employed individuals must register for Self Assessment with HMRC.
The UK tax year runs from 6 April to 5 April. If you need to complete a tax return, you must usually register by 5 October after the end of the tax year.
Online Self Assessment tax returns are normally due by 31 January following the end of the tax year. Any tax due is usually payable by the same date.
Income Tax
Self-employed profits are taxed under the normal Income Tax rules.
For England, Wales and Northern Ireland, the main Income Tax rates are usually:
Personal Allowance – 0% on income up to £12,570
Basic Rate – 20% on income from £12,571 to £50,270
Higher Rate – 40% on income from £50,271 to £125,140
Additional Rate – 45% on income over £125,140
Different rates may apply in Scotland.
National Insurance
Self-employed individuals may need to pay National Insurance through Self Assessment.
For 2026/27, Class 4 National Insurance is payable on profits over £12,570:
6% on profits from £12,570 to £50,270
2% on profits over £50,270
Class 2 National Insurance is now voluntary for many self-employed individuals, but it may still be important for protecting your National Insurance record and State Pension entitlement.
Keeping Records
Good bookkeeping is essential for self-employed individuals.
Accurate records help you claim the correct expenses, prepare your tax return and avoid HMRC problems.
MTD ITSA
Making Tax Digital for Income Tax Self Assessment is being introduced for self-employed individuals and landlords.
You may need to keep digital records and send quarterly updates to HMRC using MTD-compatible software, depending on your qualifying income.
MTD ITSA does not mean paying tax every three months. Your tax is still paid under the normal Self Assessment payment rules.