Making Tax Digital for Income Tax (MTD) has changed how some sole traders and landlords report their income and expenses to HMRC. If it applies to you, you must keep digital records, send quarterly updates using compatible software and submit a tax return after the tax year ends. Who needs to use MTD for Income Tax? MTD for Income Tax is being introduced in stages for sole traders and landlords. Your start date depends on your qualifying income: your combined income from self

Running a business comes with costs. If you are a sole trader, claiming the right allowable expenses can reduce your taxable profit and help you pay the correct amount of tax. The key is to separate business spending from personal spending and keep records to support your claims. What are allowable expenses for a sole trader? Allowable expenses are qualifying business costs deducted from your income when calculating taxable profit for Self Assessment. For example, if your inc

The Employer NIC Changes from April 2025 Currently, employers pay Class 1 NIC at 13.8% on employee wages above £9,100 a year. From April 2025, that rate rises to 15%. The threshold at which employer contributions start falls from £9,100 to £5,000. For a director drawing a salary, this means employer NIC becomes payable earlier in the year and at a higher rate. This is a meaningful shift for a strategy that has traditionally relied on keeping salary just below the secondary th

If you run a limited company, deciding how to pay yourself is one of the most important financial decisions you'll make. Whether you're a consultant, agency owner, wholesaler or private practice director, how you take money out of the business affects your personal tax, your company's Corporation Tax, and your cash flow. There's no single answer that suits every business — the right approach depends on your company's profitability, future plans, and your personal circumstance

Making Tax Digital is changing the way many self-employed people and landlords manage and report their income to HMRC. From 6 April 2026, Making Tax Digital for Income Tax applies to qualifying sole traders and landlords with gross self-employment and property income above £50,000. Those affected need to keep digital records and use MTD-compatible software to meet their reporting requirements. If you are already within MTD, or HMRC has contacted you about Making Tax Digital,

Not every business charges VAT at the same rate and getting it wrong on an invoice or VAT return can mean under- or over-charging clients, or errors on your VAT return that HMRC will query. Here's a practical breakdown of which rate applies to common small business sectors. Overview of UK VAT Rates: Highlighting Standard, Reduced, Zero, Wholesale, and Exempt Categories. The Three UK VAT Rates Standard rate — 20%: the default rate, applying to most goods and services unless sp

Running a business is challenging enough without spending hundreds of pounds every year on bookkeeping software. If you're looking for free bookkeeping software, there's an excellent solution available for many UK businesses. By opening a Mettle business bank account, you can receive FreeAgent accounting software completely free, giving you professional bookkeeping, invoicing and accounting tools without paying the normal monthly subscription. As a FreeAgent Partner, Vau Cons

What Is IR35? IR35 is a set of UK tax rules. It is designed to stop individuals from avoiding employment taxes by working through an intermediary, such as their own limited company, when the working arrangement actually resembles employment. Rather than relying solely on the written contract, HMRC looks at the reality of the working relationship. This principle is often referred to as "substance over form." Even if a contract states that someone is self-employed, HMRC may dec

From 6 April 2026, important changes to the Construction Industry Scheme (CIS) came into effect. These reforms give HMRC greater powers to tackle fraud within construction supply chains and place increased compliance responsibilities on contractors registered under the CIS scheme. For construction businesses — particularly small and medium-sized CIS contractors — these changes mean greater scrutiny of subcontractors, stricter reporting requirements and significantly higher pe

Should a construction business register for VAT before reaching the threshold? For contractors and subcontractors, the answer depends on who your customers are, how much VAT you pay on costs and how quickly the business is growing. The UK VAT registration threshold is £90,000 of taxable turnover. It is measured over a rolling 12-month period, not your financial year. You must also register if you expect your taxable turnover to exceed £90,000 in the next 30 days. Below the th

If you work as a contractor or subcontractor in the UK construction sector, knowing how the VAT Reverse Charge works is crucial. Since the Domestic Reverse Charge (DRC) was introduced, many construction businesses have faced challenges with invoicing, VAT returns, and staying compliant. Mistakes in applying the reverse charge can trigger HMRC investigations, disrupt cash flow, and cause costly errors. This guide explains what contractors need to know about Reverse Charge VAT

Contractors registered under the Construction Industry Scheme must submit accurate monthly CIS returns to HMRC. Before filing, check subcontractor verification, payments, material costs and CIS deductions. Errors can result in incorrect deductions, HMRC queries and late-filing penalties. Use this four-step Construction Industry Scheme checklist before submitting your next CIS return. Contractor reviewing CIS Return documents 1. Confirm Your Subcontractor Details Are Correct T