Quick answer: A sole trader accountant prepares your self assessment tax return, calculates your income tax and Class 4 National Insurance, and makes sure you claim every allowable business expense. Bayar Hughes & Co has supported self-employed clients from our New Eltham, London SE9 office since 1991, with fixed fees and Making Tax Digital preparation included.
Self Assessment Without the Stress
Every sole trader must register with HMRC, keep records of income and expenses, and file a self assessment return by 31 January each year — with payments on account often due in January and July on top. We prepare and file the return for you, calculate exactly what you owe (including Class 4 National Insurance on your profits), and tell you well in advance so there are no January surprises.
Just as importantly, we make sure you claim everything you are entitled to. Commonly missed allowable expenses include:
- Use of home as office — either the flat-rate simplified amount or a calculated proportion of household costs
- Business mileage in your own vehicle at HMRC's approved rates
- Tools, equipment and software, including capital allowances on larger purchases
- Professional fees, insurance, subscriptions and training that maintains existing skills
- A proportion of phone and internet costs used for the business
Making Tax Digital Is Coming for Sole Traders
Making Tax Digital for Income Tax is the biggest change to self assessment in a generation. From April 2026, sole traders and landlords with combined gross income over £50,000 must keep digital records and send HMRC quarterly updates through compatible software, followed by a final year-end declaration — replacing the single annual return. The threshold is due to drop to £30,000 from April 2027, bringing in far more of the self-employed.
Spreadsheets and shoeboxes of receipts will no longer be enough on their own. We set clients up on straightforward cloud bookkeeping software well before their start date, handle the quarterly submissions, and make sure the transition costs you as little time as possible.
When Should a Sole Trader Become a Limited Company?
There is no single profit level at which incorporation automatically makes sense — it depends on how much you earn, how much you need to draw out, and your appetite for extra paperwork. As a rough guide, the tax savings from trading through a company tend to become meaningful once profits are comfortably into five figures and you can afford to leave some money in the business, but recent changes to corporation tax and dividend taxation have narrowed the gap for many people.
Limited liability, credibility with larger customers and pension planning can matter as much as the tax arithmetic. Because we act for both sole traders and limited companies, we can run the numbers for your situation each year and tell you honestly whether incorporating would leave you better off — and handle the company formation if it would.
Services for Sole Traders & Self-Employed
Self Assessment Tax Returns
Accurate, stress-free tax returns for sole traders, landlords, directors and high earners …
Bookkeeping Services
Cloud bookkeeping on Xero, QuickBooks or Sage — tidy, accurate books all year so tax time …
VAT Returns & Registration
VAT registration, quarterly Making Tax Digital returns and scheme advice that keeps you co…
Tax Planning
Proactive personal and business tax planning — pay what you owe, and not a penny more.…
Company Formation
Hassle-free company formation — multi-jurisdiction incorporation, registrations and everyt…
Frequently Asked Questions
How much does an accountant cost for a sole trader?
A straightforward sole trader self assessment typically costs somewhere between £150 and £400, with more where bookkeeping, VAT or property income are involved. Bayar Hughes & Co quotes a fixed fee up front based on the state of your records and the complexity of your affairs.
Do I need an accountant if I am self-employed?
Not legally — you can file your own self assessment. But an accountant will usually claim expenses you would miss, keep you clear of penalties, and free up your time. With quarterly digital reporting arriving under Making Tax Digital, professional support is becoming more valuable, not less.
What expenses can I claim as a sole trader?
Anything incurred wholly and exclusively for the business: stock and materials, business mileage, use of home, phone and internet proportions, insurance, professional fees, equipment and relevant training. The rules on mixed-use costs and capital items are where people go wrong — we review your claims line by line.
When does Making Tax Digital start for sole traders?
From April 2026 if your combined self-employment and property income is over £50,000, with quarterly digital updates to HMRC replacing the single annual return. The threshold is due to fall to £30,000 from April 2027. We get clients onto compliant software well before their start date.
How much National Insurance does a sole trader pay?
Sole traders pay Class 4 National Insurance on profits above the lower profits limit (£12,570), at a main rate on profits up to the upper limit and a lower rate above it. Class 2 is now treated as paid for most, protecting state pension entitlement. We calculate it all within your return.