16. Tax and National Insurance

Overview

Your business structure and size will affect the taxes you must pay. I recommend you have a meeting with an accountant before you set up your business to discuss the tax and administrative implications. Once fully informed, you can then decide whether you need ongoing accountancy services, which services are needed and which services you would prefer to complete yourself. You may also be able to reduce costs by using online accountancy services.

Making Tax Digital is changing how self-employed people report their income and expenses to HMRC. From April 2026, the rules apply to sole traders and landlords with qualifying income over £50,000. This threshold falls to £30,000 in April 2027 and £20,000 in April 2028. Those affected must keep digital records and send quarterly updates using compatible software. The usual annual tax return and tax payment deadlines still apply.

HMRC guidance: Check if and when you need to use Making Tax Digital