So, you’ve registered as self-employed with HMRC and received your UTR.
Great — now let’s make sure everything is set up properly.

1. Set Up a Dedicated Business Bank Account

While not legally required, it’s strongly recommended.

• Use a separate account for business income and expenses
• Makes bookkeeping, tax returns, and MTD compliance much easier
• Revolut, Starling and Monzo are popular choices

Separation now saves stress later.

2. Record All Income and Expenses

Accurate records are essential from day one.

• Record all income received
• Log every expense, even if you’re unsure it’s allowable
• Keep digital copies of receipts

Missing records = higher tax or problems with HMRC.

3. Use Accounting Software

Software is quickly becoming essential for sole traders.

• Helps track income, expenses, and tax
• Options include Xero and FreeAgent
• Choosing the right software now helps future-proof your business

We’ll recommend the best option based on your trade and plans.

4. Allowable Expenses – Common Examples

You can usually claim expenses that are wholly and exclusively for business use.

Common examples:

• Office costs and stationery
• Software and subscriptions
• Marketing and advertising
• Insurance
• Professional fees
• Telephone and internet (business proportion)
• Training related to your trade
• Business travel

Personal and private costs are generally not allowable.

If in doubt, record it and ask.

5. Using Your Own Car for Business (Mileage)

If you use your personal car for business journeys:

• 45p per mile for the first 10,000 miles
• 25p per mile thereafter

You must keep a mileage log including:

• Date
• Journey
• Purpose
• Miles travelled

Commuting to a regular place of work is usually not allowable.

6. How Do You Take Money From the Business?

As a sole trader, the money you earn is your income.

• You don’t pay yourself a salary or dividends
• You simply take drawings from the business
• Tax is based on profits, not what you withdraw

We’ll help you plan for tax so there are no surprises.

7. Making Tax Digital (MTD) for Income Tax

MTD for Income Tax is being introduced for sole traders and landlords.

• You will need to keep digital records
• Submit quarterly updates to HMRC
• Final declarations will still be required

Software choice and setup are key — speak to us early to stay compliant.

8. Keep an Eye on Your Turnover

Just like limited companies:

• Monitor your rolling 12-month turnover
• VAT registration is usually required once taxable turnover exceeds £90,000, unless exempt

Early conversations can prevent late VAT registration penalties.

9. Speak to Us

You don’t have to navigate this alone.

Ask early. Plan ahead. Speak to us when things change.