Accountants for sole traders in Newcastle

What is a sole trader responsible for?

Working for yourself means there is no payroll department or employer doing the paperwork in the background. That is what trips people up. In practice, a handful of jobs come round every year and each one has a deadline attached.

These are the duties we most often take over for the sole traders we look after in Newcastle and across the North East:

What expenses can a sole trader claim?

Your tax is worked out on your profit, not your turnover, so claiming every expense you are genuinely entitled to makes a real difference to the bill. The test is that a cost has to be spent "wholly and exclusively" for the business. Common examples are stock and materials, business travel and mileage, a share of the cost of working from home, phone and internet, professional subscriptions, insurance and your accountancy fees.

Where a cost is partly private and partly business, your car or your home, say, you can only claim the business share, and you need a sensible, defensible way of splitting it. Getting this right is as much about not over-claiming as it is about not missing out. We help you draw the line in the right place and keep the evidence to stand behind it.

Keeping records without the shoebox

You do not need complicated software to trade as a sole trader, but you do need records you can trust. A carrier bag of receipts might have scraped by in the past; it is a poor fit for the digital reporting now on the way. We help you set up straightforward cloud accounting or a tidy spreadsheet that captures your income and costs as you go, so the year-end return is a quick review rather than a weekend lost to paperwork.

How Making Tax Digital affects sole traders

Making Tax Digital for Income Tax changes the way many sole traders report. From 6 April 2026 it applies to sole traders and landlords with qualifying income over £50,000, who will keep digital records and send HMRC quarterly updates instead of one return a year. Later phases are planned to bring in those with income over £30,000 from April 2027 and over £20,000 from April 2028. These dates are announced government policy and the detail can change, so always check the current position and your own start date on GOV.UK.

The practical takeaway is simple. The sooner your records are digital and in order, the easier the switch will be. We move clients across early, so the first quarterly deadline comes and goes without any drama.

Sole trader or limited company?

Trading as a sole trader is the right call for a lot of people, but as profits grow a limited company can be more tax-efficient and gives you limited liability. There is no magic figure that makes a company worthwhile for everyone. It comes down to your profit, how much you take out and where you want the business to go. If you are weighing it up, read how we support limited companies, or ask us for a straight comparison on your own numbers. And if you earn from several sources alongside your trade, our page for the self-employed goes into that in more detail.