A Unique Taxpayer Reference (UTR) is a 10-digit number issued by HMRC to identify individuals and businesses for tax purposes. It’s like your tax fingerprint—used every time you file a Self Assessment, make tax payments, or communicate with HMRC.

​

You’ll need a UTR if you:

• Are self-employed or a sole trader

• Receive rental income

• Run a limited company

• Are part of a partnership

• Have income not taxed at source (e.g. freelance work, dividends, foreign income)

How to Get a UTR Number

You’ll receive a UTR automatically when you register for Self Assessment or Corporation Tax. Here’s how:

For Individuals (Self-Employed or Sole Traders)

1. Register for Self Assessment via HMRC’s website or by using our UTR Registration Form below

2. Provide your personal details, National Insurance number, and business info

3. HMRC will send your UTR by post within 10–15 working days

For Limited Companies

• HMRC issues a UTR automatically after registration with Companies House

• It arrives in a letter at your registered business address

For Partnerships

• The partnership gets a UTR, and each partner receives their own individual UTR

What You Do With a UTR

Your UTR is essential for:

• Filing Self Assessment tax returns

• Claiming CIS tax deductions (contractors only)

• Making tax payments and referencing your account

• Communicating with HMRC about your tax affairs

• Registering for Making Tax Digital (MTD) services

📌 Keep it safe—you’ll need it every time you deal with HMRC.

​

At Accounted4TAx Ltd, we support clients at every stage of their tax journey:

• Registering for Self Assessment and obtaining your UTR

• Setting up MTD-compliant accounting software

• Filing accurate tax returns and defending expense claims

• Managing CIS deductions and preparing supporting statements

• Responding to HMRC enquiries with clarity and confidence

“We don’t just help you get your UTR—we make sure you know how to use it.”

Already registered? Why not start your Online Self Assessment Tax Return instead

​If you’ve started freelancing, selling handmade goods online, or earning through a side hustle, congratulations—you’re officially stepping into self-employment. It’s a powerful move toward flexibility, independence, and building something of your own. But before you get too swept up in your creative or business goals, it’s worth understanding what self-employment means—especially when it comes to your responsibilities. ​ Working for Yourself: The Basics Self-employment means you’re not on a company payroll. You decide when, how, and where you work. You find clients or customers, deliver your service or product, and get paid directly. No boss. No payslips. No built-in pension or sick pay either. ​ For many, it starts as a side hustle—a weekend gig, freelance job, or passion project that begins earning real income. But as soon as you earn over £1,000 in a tax year from self-employment, you must register with HMRC. ​ From there, you’ll have some tax rules to follow—but don’t panic. Here’s what that looks like in plain English. ​ Self-Employment & Tax: What You Need to Know

• Self Assessment: You’ll file a tax return each year reporting your income and expenses. HMRC uses this to calculate how much tax you owe.

• Income Tax: You pay tax on your profits (not total income). So if you earn £10,000 and spend £3,000 on business costs, you’re taxed on £7,000.

• National Insurance Contributions (NICs): Once your profits pass certain thresholds, you’ll owe Class 2 and possibly Class 4 NICs.

• VAT: If your turnover exceeds £90,000 in a 12-month period, you’ll need to register for VAT.

• Payments on Account: If your tax bill is over £1,000, you might have to make advance payments toward the following year’s tax. A surprise if you’re not prepared!

• Making Tax Digital (MTD): Digital record-keeping and software are becoming essential. MTD for Income Tax will soon make quarterly submissions the norm.

Ready to Get Started? Self-employment is a rewarding path—but handling your tax correctly from the start makes all the difference. Whether you’re just testing a side project or building a full-time business, clear guidance can save you time, stress, and money. ​ 📩 Need help registering with HMRC, understanding what counts as a business expense, or preparing for your first tax return? We offer tailored support for sole traders, construction workers, freelancers, landlords and small business owners—making it easy to stay compliant while focusing on what you do best. Reach out today to get started:

Email: info@accounted4tax.co.uk

WhatsApp +447563811938

Phone/TM: +447563811938

Who needs to register?

If you're working for yourself—whether you're freelancing, running a side hustle, or offering services directly to customers—you’re classed as self-employed and will typically register as a sole trader.

This is the most common and straightforward business structure in the UK. It means you run the business as an individual and take full responsibility for its income, expenses, and taxes.

​

When to Register?

You must register with HMRC as a sole trader if you earn more than £1,000 from self-employment in a tax year (6 April to 5 April). Deadline: You must register by 5 October of your second trading year.

​

After You Register

Once you're officially self-employed, here’s what comes next:

• Submit a Self Assessment tax return every year

• Pay Income Tax and National Insurance on your profits

• Keep clear business records (income, expenses, receipts)

• Check if you need to register for VAT (threshold: £90,000)

• Plan ahead—you may need to make Payments on Account

• Stay informed about Making Tax Digital, which will eventually require you to keep digital records and submit quarterly updates

Starting simple is smart—but staying compliant is essential as your business grows.

​

📩 Need help registering as a sole trader, tracking your income, or preparing your first tax return?

We offer clear, practical support to help you meet HMRC’s requirements with confidence and ease. Get in touch today and take the next step in building your business, the right way.

​

or

To complete your Self Assessment tax return, you will need the following documents: P60 or P45 forms, records of self-employment income and expenses, bank statements, dividend vouchers, pension contributions, and any other relevant financial documents. Having these documents ready will help ensure accurate and timely submission of your tax return.

The Construction Industry Scheme (CIS) is a tax deduction system run by HMRC. It applies to payments made by contractors to subcontractors for construction work in the UK. Under CIS:

• Contractors deduct tax at source from subcontractors’ payments.

• These deductions count as advance payments toward the subcontractor’s Income Tax and National Insurance.

​​ CIS covers most construction activities, including building, demolition, repairs, decorating, and installing systems like heating or lighting. When to Register: You must register for CIS if:

• You’re a contractor who pays subcontractors for construction work.

• You’re a subcontractor who is paid by a contractor for construction work.

Subcontractors aren’t legally required to register, but if you don’t, you’ll face higher tax deductions (more on that below). Best time to register: As soon as you start working in construction and expect to be paid by a contractor. Don’t wait until after your first invoice. Why Register for CIS? Registering as a subcontractor gives you several advantages:

• Lower tax deduction rate:

  • Registered: 20%

  • Not registered: 30% That’s a 10% difference straight off your income.

• Easier to claim tax refunds: HMRC tracks your deductions, making it simpler to offset them against your tax bill.

• Professional credibility: Many contractors prefer working with CIS-registered subcontractors.

• Eligibility for Gross Payment Status: If you meet certain criteria, you can apply to receive payments without any deductions (0%).

​ How to Recover Overpaid CIS Tax If too much tax has been deducted, you can claim it back: For Sole Traders or Partnerships:

• Include your CIS deductions in your Self Assessment tax return.

• HMRC will offset this against your tax bill or issue a refund if you’ve overpaid.

For Limited Companies:

• CIS deductions can be offset against your PAYE liabilities during the year.

• If you don’t run payroll or still have overpaid tax at year-end, you can:

  • Claim a refund online via your Government Gateway account, or

  • Submit a written claim to HMRC with your company details, UTR, PAYE reference, and deduction statements.

Need help navigating CIS tax and getting your deductions right? Whether you’re just starting out in construction or looking to recover overpaid CIS, I offer tailored support for subcontractors and sole traders. From registration to reclaiming your refund, I’ll guide you step-by-step. Get in touch today to save time, reduce stress, and keep more of what you earn. Or,

What Is Income Tax?

Income Tax is a tax you pay on your earnings. It applies to income from:

• Employment (wages, bonuses, benefits)

• Self-employment (profits from sole trading or partnerships)

• Rental income

• Dividends and savings

• Pensions and other taxable sources

You pay Income Tax only on income above your Personal Allowance, which is currently £12,570 per year (2025/26).

👷 Employment vs. Self-Employment Tax

Employment Income

• Tax is deducted automatically through PAYE (Pay As You Earn) by your employer.

• You also pay Class 1 National Insurance.

• You receive a payslip showing gross pay, tax, and NI deductions.

Self-Employment Income

• You report income via a Self Assessment tax return.

• You pay:

  • Income Tax on profits after allowable expenses

  • Class 2 and Class 4 National Insurance

• You must keep records and submit returns annually.

​

Income Tax Bands and Rates (2025/26)

• 0%: Income up to £12,570 (Personal Allowance)

• 20%: Income from £12,571 to £50,270 (Basic Rate)

• 40%: Income from £50,271 to £125,140 (Higher Rate)

• 45%: Income above £125,140 (Additional Rate)

Note: The Personal Allowance reduces if your income exceeds £100,000.

CIS Tax Deductions & Their Relationship to Income Tax

The Construction Industry Scheme (CIS) applies to subcontractors working in construction. Under CIS:

• Contractors deduct 20% or 30% from payments made to subcontractors.

• These deductions are advance payments toward the subcontractor’s Income Tax and National Insurance.

CIS Deduction Rates

• 20% – for registered subcontractors

• 30% – for unregistered subcontractors

• 0% – if the subcontractor has Gross Payment Status

How CIS Deductions Affect Your Tax Return

• CIS deductions are recorded by HMRC.

• When you file your Self Assessment, you declare your income and expenses.

• The CIS tax already deducted is offset against your final tax bill.

• If you’ve overpaid, you may be eligible for a tax refund.

Example: CIS & Income Tax in Action

Let’s say you earned £40,000 as a subcontractor and had £8,000 in allowable expenses.

• Taxable profit: £32,000

• Income Tax:

  • £12,570 tax-free

  • £19,430 taxed at 20% = £3,886

• CIS deducted at source: £8,000

• Result: You’ve overpaid tax and may be due a refund of £4,114

How TACS Supports You

• Register for Self Assessment and CIS

• Track and reconcile CIS deductions

• Advice about allowable expenses

• File accurate tax returns

• Claim refunds and avoid penalties

• Understand tax bands and optimise allowances

Or

National Insurance is a UK tax that helps fund state benefits like the NHS, pensions, and maternity allowance. If you're employed or self-employed, you may need to pay NICs depending on your income and status.

National Insurance for Employed Individuals

• NICs are automatically deducted through PAYE by your employer

• You pay Class 1 NICs based on your weekly or monthly earnings

• Contributions help build entitlement to the State Pension and other benefits

• You stop paying NICs once you reach State Pension age

National Insurance for Self-Employed Individuals

• You pay NICs through your Self Assessment tax return

• NICs are based on your annual profits after expenses

• There are two types of NICs for self-employed people:

  • Class 2 NICs (voluntary for low earners)

  • Class 4 NICs (mandatory above a profit threshold)

NIC Rates for Self-Employed (2025/26)

• Class 2 NICs:

  • Voluntary if profits are below £6,725

  • Automatically credited if profits are between £6,725 and £12,570

  • Rate: £3.50 per week (voluntary)

• Class 4 NICs:

  • 6% on profits between £12,570 and £50,270

  • 2% on profits above £50,270

  • Not payable if profits are below £12,570

NICs and CIS Subcontractors

If you're paid under the Construction Industry Scheme (CIS):

• CIS deductions cover Income Tax only, not NICs

• You must still pay Class 4 NICs on your profits

• If your profits are low, consider voluntary Class 2 NICs to protect your State Pension

• NICs are calculated and paid through your Self Assessment tax return

Why NICs Matter?

• They build your entitlement to:

  • State Pension

  • Maternity Allowance

  • Employment and Support Allowance

• You need at least 10 qualifying years to receive any State Pension

• You need 35 qualifying years for the full State Pension

• Voluntary contributions can help fill gaps in your record

How can we Support You?

• Register for Self Assessment and track NIC obligations

• Calculate and file Class 4 NICs accurately

• Advise on voluntary Class 2 contributions

• Reconcile CIS deductions and ensure full compliance

• Review your NIC record and protect your future benefits

or

Personal Allowance is the amount of income you can earn each tax year before paying any Income Tax. It applies to most UK taxpayers and resets annually on 6 April, marking the start of the new tax year.

​

For the 2025-2026 tax year, the standard Personal Allowance is £12,570 — meaning you can earn up to this amount tax-free.

Who Gets It?

You’re entitled to Personal Allowance if you’re:

• A UK resident

• A UK citizen or a citizen of a country with a double-taxation agreement

Even children and pensioners qualify. However, non-residents may only receive it under specific conditions — such as working for the UK government or being from a qualifying country.

When Is It Reduced?

If your adjusted net income exceeds £100,000, your Personal Allowance is reduced by £1 for every £2 over the threshold.

Example: If your income is £120,000, you lose £10,000 of your allowance — leaving you with just £2,570. Once your income hits £125,140, your Personal Allowance is completely removed.

This creates the infamous “60% tax trap”, where marginal tax rates spike due to the tapering effect.

How It Works in Practice

Your Personal Allowance is deducted from your total income before tax is calculated. For example:

• If you earn £30,000, only £17,430 is taxable (£30,000 – £12,570)

• You’ll pay 20% tax on that amount, which equals £3,486

If you're self-employed, the allowance is applied automatically when you file your Self Assessment return. If you're employed, it's reflected in your tax code — usually 1257L.

Related Allowances & Interactions

• Marriage Allowance: Transfer up to £1,260 of unused allowance to your spouse

• Blind Person’s Allowance: Adds £3,070 to your tax-free income

• Trading Allowance: First £1,000 of self-employment income is tax-free

• Property Allowance: First £1,000 of rental income is tax-free (unless using Rent-a-Room Scheme)

Common Pitfalls

• Emergency tax codes may temporarily ignore your allowance

• Claiming remittance basis (for non-doms) forfeits your Personal Allowance

• Double claiming (e.g. via employment and Self Assessment) can trigger HMRC corrections

Tax Year Reference: 2025-2026

• Tax year runs from 6 April 2025 to 5 April 2026

• Personal Allowance remains frozen at £12,570

• Thresholds and bands are unchanged until April 2028, increasing the risk of fiscal drag

Need Help Maximising Your Allowance?

We help self-employed individuals and small business owners:

• Understand their tax position

• Optimise allowances and reliefs

• Avoid the 60% trap and overpayments

• Stay compliant with HMRC

Contact us today for expert support and peace of mind.

Your Personal Allowance is free money — don’t let it go to waste. Let’s make every pound count.

What Is the UK Tax Year?

• The UK tax year runs from 6 April to 5 April of the following year

• It applies to individuals, including sole traders, landlords, and employees

• All Self Assessment tax returns relate to income earned during this period

• HMRC uses this timeframe to apply personal allowances, tax bands, and deadlines

• The current tax year is referred to as 2025/26, covering income from 6 April 2025 to 5 April 2026

What Is the Financial Year?

• The financial year (also called the fiscal year) is a 12-month accounting period used for reporting income, expenses, and tax

• For individuals, it usually matches the tax year: 6 April to 5 April

• For limited companies, the financial year is based on the company’s incorporation date

• Companies can choose their own financial year-end and report to Companies House accordingly

• The financial year is used to prepare Annual Accounts, calculate Corporation Tax, and assess business performance

​

How ca we Support You

• Understand and plan around the UK tax year

• File accurate Self Assessment returns for each tax year

• Align business accounts with HMRC deadlines

• Prepare for year-end submissions and avoid penalties

• Educate clients on tax bands, allowances, and compliance

or

Income You Must Declare on Self Assessment

• Self-employment (sole trader, freelance, side hustle, hobby with turnover over £1000)

• Employment income

• Rental income from UK or overseas property

• Savings interest

• Dividend income and other investment returns

• Foreign income (e.g. pensions, property, earnings abroad)

• Capital gains from selling shares, property, or assets

• Pension income and taxable lump sums

• Tips, commissions, freelance or casual earnings

• Income from trusts, estates, or settlements

• Other untaxed income such as online sales, gigs, or digital services

Forms Typically Used in Self Assessment

• SA100 – Main individual tax return (required for everyone)

• SA102 – Employment income details

• SA103S / SA103F – Self-employment (short/full form depending on turnover)

• SA104S / SA104F – Partnership income

• SA105 – Property income (including rental properties)

• SA106 – Foreign income and gains

• SA108 – Capital Gains Tax details

• SA109 – Non-residence or dual tax residence

• SA101 – Additional information (e.g. tax reliefs, pension contributions)

​

“Tax doesn’t need to be taxing—especially when you’ve got expert guidance and crystal-clear records on your side. At Accounted4Tax, we do more than tick boxes. We simplify your obligations, protect your position, and give you the confidence to file with certainty. Whether it's rental income, self-employment, or capital gains—we help you get it right the first time, every time.

What is MTD for ITSA?

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) is a government initiative designed to modernize tax reporting for sole traders and landlords.

• Instead of submitting an annual tax return, taxpayers will need to keep digital records and submit quarterly updates to HMRC using MTD-compatible software.

• This shift aims to reduce errors, improve efficiency, and provide real-time tax insights—but it also means sole traders must adapt quickly to new digital requirements.

Who does MTD applies to?

MTD for ITSA applies to individuals who file Self Assessment tax returns and earn income from:

• Self-employment (sole traders),

• Property rental (landlords),

• or a mix of self employment and property rental.

However, not everyone is required to comply immediately.

When will the MTD start?

MTD will be rollout in three different stages, based on qualifying income

• 6th of April 2026 – Sole traders and landlords earning over £50,000 must comply.

• 6th of April 2027 – Those earning between £30,000 and £50,000 will be included.

• 6th of April 2028 Those earning £20,000+ may be required to join later.

Exemptions: Some individuals may be exempt due to digital exclusion or other special circumstances.

What is the assessment period?

HMRC will assess your qualifying income for the period prior to the tax year that you will start as follows

• for those earning over £50,000 in 2024-2025 tax year, the start is the 6th of April 2026

• for those earning over £30,000 in 2025-2026 tax year, the start is the 6th of April 2027

• for those earning over £20,000 in 2026-2027 tax year, the start is the 6th of April 2028

What is changing?

If your gross qualifying income (before expenses) exceeds the threshold, you must:

• Keep digital records of income and expenses using MTD-compatible software,

• Submit quarterly updates to HMRC of income and expenses,

• Submit an End Of Period Statement (EOPS),

• Submit the Final Declaration.

​This means sole traders and landlords must shift from traditional bookkeeping to digital tax management—which can be time-consuming and complex without expert guidance.

What are the deadlines?

The deadlines for the quarterly submissions is one month after the end of the period, while the deadline for the EOPS and Final Declaration is the 31st of January following the end of the tax year.

How can we help?

We specialize in helping sole traders transition smoothly to MTD for ITSA. Here’s how we support you:

• Free transition from regular assessment to MTD including the registration.

• MTD-Compatible Solutions – We’ll set up your records with the right software—so you stay compliant without the hassle.

• Quarterly Tax Management – Forget tax worries—we’ll prepare and submit your quarterly updates on your behalf.

• Expert Guidance – We break down complex tax rules into plain, easy-to-understand advice.

• Cost-Effective Services – Get a tailored, affordable tax solution without overspending on unnecessary tools.

• Personalized Support – Whether you need one-on-one assistance or a full-service tax management plan, we’ve got you covered.

Accounting software is a digital tool designed to help individuals and businesses record, manage, and report financial transactions. It replaces traditional paper-based bookkeeping by automating tasks such as invoicing, expense tracking, bank reconciliation, and tax calculations. By consolidating financial data into one system, accounting software improves accuracy, saves time, and provides real-time insights into financial performance.

​

Benefits of Using Accounting Software

• Time-Saving Automation: Repetitive tasks like categorising transactions or generating reports are handled automatically, improving workflow and reducing administrative burden.

• Accuracy and Reliability: Built-in error checks and logical rules minimise the risk of manual mistakes, ensuring greater precision in records and returns.

• Real-Time Financial Insights: Dashboards and analytics provide instant visibility into income, expenses, and profitability, supporting better forecasting and planning.

• Cloud-Based Accessibility: Users can access records securely from any location, share data with accountants remotely, and collaborate more easily.

• Compliance-Ready: Many platforms are designed with tax regulations in mind, generating VAT returns, calculating tax liabilities, and maintaining audit trails to support HMRC scrutiny.

• Secure Backup and Data Protection: Unlike paper records, digital data is encrypted, backed up regularly, and shielded from physical loss or damage.

​

Making Tax Digital (MTD) Compliance

HMRC’s Making Tax Digital initiative requires businesses and individuals to keep digital records and submit tax returns using compatible software. MTD for Income Tax Self Assessment (ITSA) is being phased in over the coming years:

• April 2026: Individuals with qualifying income over £50,000 must comply

• April 2027: Threshold reduces to £30,000

• Expected future phase: For income over £20,000

Accounting software supports MTD compliance by:

• Maintaining digital records in line with HMRC standards

• Submitting quarterly updates and end-of-year statements through recognised platforms

• Reducing reliance on manual spreadsheets or handwritten logs

• Improving accuracy, record traceability, and audit readiness

Examples of Popular Accounting Software

The client uses MTD-compatible software that streamlines financial management and enhances compliance. Widely used options include:

• QuickBooks Online – Ideal for small businesses, with intuitive workflows and HMRC submission tools

• Xero – Offers real-time reporting and seamless integration with banks and payroll systems

• FreeAgent – Tailored for sole traders and freelancers, with automated reminders and expense management

Payments on account are advance payments made twice a year toward your next Self Assessment tax bill. HMRC uses this system to help spread the cost of your tax liability, based on the assumption that your income will be similar to the previous year.

If your tax bill is over £1,000 and less than 80% of your tax was collected at source (e.g. through PAYE), you’ll likely be required to make payments on account.

How Payments on Account Work

• You make two instalments each year

• Each payment is 50% of your previous year’s tax bill (including Class 4 National Insurance if applicable)

• These payments go toward your next tax year’s bill, not the current one

Payment Deadlines

• 31 January – First payment on account

• 31 July – Second payment on account

💡 Example: If your tax bill for 2024-2025 was £2,000, you’ll pay £1,000 on 31 January 2026 and £1,000 on 31 July 2026 toward your 2025-2026 tax bill.

What Is a Balancing Payment?

After you submit your tax return for the current year, HMRC compares your actual tax liability to what you’ve already paid on account:

• If you underpaid, you’ll need to make a balancing payment by 31 January

• If you overpaid, HMRC will issue a refund or apply the surplus to your next bill

Can You Reduce Payments on Account?

Yes — if you expect your income to be lower than last year, you can apply to reduce your payments:

• Online via your HMRC account

• By submitting form SA303 by post

⚠️ Be cautious: if you reduce your payments too much and end up owing more, HMRC will charge interest on the shortfall.

First-Time Filers: What to Expect

If this is your first year filing and your tax bill exceeds £1,000, you’ll need to:

• Pay your full tax bill for the current year

• Make your first payment on account for the next year — all by 31 January

This can be a surprise, so it’s wise to prepare early and set aside funds throughout the year.

Here is an example: Tax Liability: £2,000

Let’s say your total Self Assessment liability for 2024–2025 is £2,000. This includes:

• Income Tax

• Class 4 National Insurance Contributions (if applicable)

Since your bill is over £1,000 and less than 80% was collected through PAYE, HMRC will require you to make Payments on Account toward the 2025–2026 tax year.

What You’ll Need to Pay by 31 January 2026

• £2,000 for your 2024–2025 tax liability (the “balancing payment”)

• £1,000 first Payment on Account for 2025–2026 (50% of £2,000)

Total due by 31 January 2026: £3,000

What You’ll Need to Pay by 31 July 2026

• £1,000 second Payment on Account for 2025–2026

​

Need Help Managing Payments on Account?

We help self-employed individuals and small business owners:

• Understand their tax obligations

• Forecast payments accurately

• Avoid penalties and interest charges

• Reduce payments safely when income drops

📩 Contact us today for expert support and peace of mind. Let’s make tax season predictable — not painful.