The key dates

• 5 October 2026: tell HMRC if you need to file a return for the first time.
• 31 October 2026: deadline for paper returns.
• 31 January 2027: online return, balancing payment for 2025/26 and first payment on account for 2026/27.
• 31 July 2027: second payment on account for 2026/27.

What to gather now

• Your Unique Taxpayer Reference (UTR) and Government Gateway login.
• P60, P45 or P11D if you were employed or received benefits.
• Self-employed income and expenses, ideally from your bookkeeping software.
• Rental income and costs, including mortgage interest statements.
• Bank and building society interest, dividends and any gains from selling shares or property.
• Pension contributions and Gift Aid donations, which can reduce your bill.

Payments on account, explained

If your last bill was over £1,000 and less than 80% of your tax was collected at source, HMRC asks for two advance payments towards next year, each half of this year’s bill. The first year this happens can feel like paying 150% at once. If your income has dropped, you can ask to reduce them — but only if you are confident, because interest applies if you reduce too far.

What happens if you miss it

A late return means an immediate £100 penalty, even if no tax is owed. After three months, daily penalties of £10 start, and further penalties follow at six and twelve months. Late payment adds interest and its own penalties.

How we help

We prepare and check your return, explain the numbers before anything is filed and tell you exactly what to pay and when. File early and you will know your January bill in November, with time to plan for it.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

Who has to join

• From 6 April 2026: qualifying income over £50,000 (based on your 2024/25 return).
• From 6 April 2027: qualifying income over £30,000 (based on your 2025/26 return).
• From 6 April 2028: qualifying income over £20,000 (based on your 2026/27 return).

Qualifying income is your gross income from self-employment and property added together, before expenses. A landlord with £22,000 of rent and a sole trader business turning over £15,000 has £37,000 of qualifying income, even if profits are much lower.

What you will need to do

• Keep records of income and expenses digitally, in MTD-compatible software.
• Send a quarterly update by 7 August, 7 November, 7 February and 7 May.
• Submit a final declaration by 31 January after the end of the tax year.

Quarterly updates are summaries, not mini tax returns. They do not change what you pay, but late updates can build up penalty points.

Getting ready without the stress

• Check your qualifying income for the relevant year now.
• Open a separate bank account for the business or lettings if you haven’t already.
• Choose software that links to your bank feed so most transactions record themselves.
• Start photographing receipts as you get them, rather than in a batch at year end.

How we help

We set up the software, connect your bank, agree a simple monthly routine and file the quarterly updates for you. You keep running your business; we keep HMRC informed.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

Sole trader: simple and flexible

You and the business are the same legal person. Profits are taxed through Self Assessment with Income Tax and Class 4 National Insurance. Setting up takes minutes, the admin is light and you can take money out whenever you like. The trade-off: you are personally liable for business debts.

Limited company: separate and structured

The company is its own legal entity. It pays Corporation Tax on profits — 19% on profits up to £50,000, 25% above £250,000, with marginal relief in between. Directors usually take a mix of salary and dividends. Your personal liability is generally limited to what you invest.

What changes the decision

• Profit level: at lower profits, the tax saving from a company is often small or disappears once extra costs are counted.
• Dividend tax: from April 2026 the ordinary and upper dividend rates rose to 10.75% and 35.75%, which narrows the gap for some owners.
• Risk: if you sign leases, employ staff or take on large contracts, limited liability matters more.
• Clients: some larger customers prefer or require working with a company.
• Admin: companies file annual accounts and a confirmation statement at Companies House, a Corporation Tax return and usually run payroll. Directors also need to verify their identity with Companies House.

A practical approach

Many owners start as sole traders and incorporate once profits are steady and they don’t need all the money they make. The right moment is a numbers question, not a feeling.

How we help

We model your likely profit under both structures, include every cost and compare the money you would keep. If a company makes sense, we form it, register it for tax and set up payroll.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.

Costs you can usually claim

• Office costs: stationery, printer ink, postage and software subscriptions.
• Phone and internet: the business share of your bills.
• Travel: fuel, parking, train fares and hotels for business trips — but not your regular commute.
• Stock and materials you buy to sell or use in your work.
• Professional fees: accountants, solicitors and trade body memberships.
• Insurance: public liability and professional indemnity.
• Marketing: your website, advertising and business cards.
• Training that updates skills you already use in the business.

Simplified expenses

Instead of working out actual costs, you can use flat rates for some items:

• Vehicles: 45p per business mile for the first 10,000 miles, then 25p.
• Working from home: £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for more than 100 hours.

Common mistakes

• Claiming everyday clothing. Only uniforms and protective clothing count.
• Forgetting small, regular costs such as bank charges and app subscriptions.
• Mixing personal and business spending in one account, which makes the business share hard to prove.

Keep the evidence

Keep receipts and invoices for every claim. A photo in your bookkeeping app is enough, and it saves hours at year end.

How we help

We review your costs, make sure nothing allowable is missed, and flag anything HMRC is likely to question — before your return is filed.

This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.