The Freelancer Tax Checklist

A practical, plain-English checklist for anyone starting out freelancing or working as a sole trader in the UK. It is in the order things actually happen, from before your first invoice to the records you keep years afterwards.

First: do you even need to file?

There is a £1,000 trading allowance. If your gross self-employed income — what you invoiced, before a single expense comes off — is £1,000 or less in a tax year, you generally do not need to register for Self Assessment at all. Go over £1,000 and you do, even in a year you made no profit.

Two things catch people. It is measured on gross income, not profit. And it runs over the tax year, 6 April to 5 April, not the calendar year.

Before you earn a penny

• Register as self-employed with HMRC. If this is the first tax year you need to file a return, you must tell HMRC by 5 October following the end of that tax year. Which registration form you need depends on whether you have filed before.
• Get your Unique Taxpayer Reference. HMRC sends the UTR after you register and you cannot file without it — what a UTR is and how to find yours.
• Open a separate business account, or at the very least keep business transactions clearly apart, so your bookkeeping does not turn into a forensic exercise next January.

What you will actually pay

Two separate bills come out of the same profit figure: income tax and National Insurance. The personal allowance is £12,570, and it tapers away by £1 for every £2 you earn over £100,000, so it is gone entirely at £125,140.

Outside Scotland, income tax runs at 20% on the first £37,700 of taxable income, 40% from there to £125,140, and 45% above that. Scotland sets its own bands — six of them — so if you are a Scottish taxpayer the rates above do not apply to you and you need the Scottish table instead.

National Insurance

• Class 2: £3.65 a week for 2026–27. You are treated as having paid it once profits reach £7,105. Below that you owe nothing, but you can pay voluntarily to protect your State Pension record — and for a lot of people that is worth doing.
• Class 4: 6% on profits between £12,570 and £50,270, and 2% on profits above £50,270.

VAT — do you need to register?

You must register once your VAT-taxable turnover goes over £90,000 in any rolling 12-month period — not your tax year, not your accounting year, any 12 months. You also have to register if you expect to pass £90,000 within the next 30 days alone. Miss the trigger and you can end up owing VAT on sales going back to the date you should have registered, out of money you have already spent.

Self Assessment deadlines

• 5 October — tell HMRC if this is your first return.
• 31 October — paper return deadline.
• 31 January — online return and payment deadline, and the date your first payment on account falls due.
• 31 July — second payment on account, if HMRC has asked you to make one.

The full year, including the dates that are not about tax returns, is in our 2026–27 tax year calendar.

Payments on account — the bill nobody budgets for

This is the one that ruins a first January. If your Self Assessment bill is £1,000 or more, and less than 80% of your tax was already deducted at source, HMRC asks you to pay next year’s tax in advance in two instalments — each one half of last year’s bill, due 31 January and 31 July.

So your first 31 January is not one bill. It is last year’s tax in full, plus half of it again on top. If your income has genuinely fallen you can apply to reduce the payments — see how form SA303 works, and when reducing backfires.

What being late costs

• Filing late: £100 straight away, even if you owe no tax. After 3 months, £10 a day up to £900. After 6 months, 5% of the tax due or £300, whichever is greater — and the same again at 12 months.
• Paying late: 5% of the unpaid tax at 30 days, at 6 months and at 12 months, plus interest running the whole time.

Under Making Tax Digital the late-filing side moves to a points system — what happens when you miss an MTD deadline.

Expenses people forget to claim

• Working from home. HMRC’s simplified flat rates are £10 a month for 25–50 hours, £18 for 51–100 and £26 for 101 hours or more. No receipts, no apportioning the electricity bill. Worth checking the business rates position too if you work from home full time.
• Mileage. 55p per mile for the first 10,000 business miles in the tax year from 6 April 2026, dropping after that. Keep a simple log: date, destination, purpose, miles.
• Equipment. Laptops, cameras and tools usually go through capital allowances rather than ordinary expenses, and the difference changes what you can claim in year one.

Making Tax Digital for Income Tax

From April 2026, sole traders and landlords with qualifying income above £50,000 must keep digital records and send quarterly updates to HMRC. The threshold drops to £30,000 in April 2027 and £20,000 in April 2028. If that is you, the spreadsheet-and-shoebox method stops being an option — the software has to talk to HMRC directly.

Records

Keep business records for at least five years after the 31 January submission deadline for that tax year — invoices, receipts, mileage logs and bank statements. More detail on what counts and what you can throw away: how long to keep business records.

Read next

• Every 2026–27 tax date in one calendar
• Your UTR number, explained
• Reducing payments on account with SA303
• What insurance a self-employed person actually needs

Sources

gov.uk: tax-free allowances on property and trading income; self-employed National Insurance rates; register for VAT; payments on account; Self Assessment penalties; simplified expenses; Self Assessment deadlines.

Checked 7 September 2026. Rates and thresholds change every tax year — re-check against gov.uk before relying on any of this for a return. General information, not tax or legal advice.