The 5 April tax year end can come around quickly, especially when you are busy running your business, serving customers, chasing payments and keeping everything moving. But for sole traders, the weeks before 5 April are a useful chance to pause and check where you stand before the tax year closes.
Once the tax year ends, some planning options become harder or are no longer available. That does not mean you need to panic or make rushed decisions. It simply means you should review your income, expenses, records and upcoming tax position while there is still time to act.
Good tax planning is not about avoiding tax. It is about making sure you pay the right amount, claim what you are allowed to claim and avoid nasty surprises when your Self Assessment bill arrives.
If you feel unsure where to start, working with an accountant for sole trader businesses can help you get a clear picture before the deadline passes.
Check your profit for the year so far
Start by looking at your income and expenses for the tax year. Your taxable profit is not simply the money that came into your bank account. It is your business income minus allowable business expenses.
For the 2026/27 tax year, the standard Personal Allowance is £12,570. In England, Wales and Northern Ireland, income above that is generally taxed at 20% within the basic rate band, 40% in the higher rate band and 45% in the additional rate band. Scotland has different income tax bands.
As a sole trader, you may also pay Class 4 National Insurance if your profits are above the relevant threshold. For 2026/27, Class 4 National Insurance is 6% on profits over £12,570 up to £50,270, and 2% on profits above £50,270.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
This is why it helps to know your estimated profit before 5 April. If your income has increased, your tax bill may be higher than last year. If profits have fallen, you may need to review your payments on account.
Make sure your expenses are properly recorded
Before the tax year ends, check whether all your business expenses have been added to your records. Missing receipts, forgotten subscriptions and unrecorded mileage can all affect your final tax position.
Common expenses for sole traders may include:
- Business insurance
- Accountancy fees
- Software subscriptions
- Phone and internet costs used for business
- Travel and mileage
- Office supplies
- Marketing and advertising
- Training linked to your trade
- Use of home as office
The key point is that expenses must be wholly and exclusively for business purposes. If something has both personal and business use, only the business part should normally be claimed.
This is where a self-employed accountant can be useful. You do not want to miss genuine expenses, but you also do not want to claim costs incorrectly and create issues later.
Review unpaid invoices and cash flow
Tax planning is not just about the final tax number. It is also about cash flow.
Look at unpaid invoices before 5 April. Are there customers who still owe you money? Are there payments you expected to receive but have not yet arrived? If your accounts are prepared on the accruals basis, income may still be included even if the customer has not paid you yet.
You should also check whether you have put enough money aside for tax. Many sole traders find January difficult because the Self Assessment payment can include both the balancing payment for the previous tax year and the first payment on account for the next one.
A simple habit can make a big difference. Each time you get paid, move a percentage into a separate tax savings account. This does not reduce the tax itself, but it can reduce stress.
Think about purchases before the year end
If you need equipment, tools, a laptop, software or other business assets, it may be worth reviewing whether the purchase should be made before 5 April.
This does not mean you should buy things just to reduce tax. Spending £1 to save a smaller amount in tax is not a saving if the purchase is not useful. But if you already need something for the business, the timing may matter.
Before making larger purchases, check how they will be treated for tax. Some items may qualify for capital allowances, while others may be treated differently. Proper sole trader accountancy services can help you decide what is sensible and what is simply unnecessary spending.
Check your pension contributions
Pension contributions can be an important part of year-end planning. As a sole trader, you do not have an employer automatically contributing unless you have separate employment as well, so it is easy to leave pensions until later.
Personal pension contributions may receive tax relief, subject to the usual limits and rules. If you have had a strong year, it may be worth reviewing whether an extra contribution before 5 April is suitable for you.
This is not just a tax point. It is also about planning for your future. You work hard for your business, so it makes sense to think beyond the next tax bill.
Watch the VAT threshold
If your taxable turnover is getting close to the VAT registration threshold, do not wait until your year-end accounts are finished to check it.
The VAT registration threshold is currently more than £90,000 of taxable turnover over a rolling 12-month period. This is not based only on your accounting year or the tax year. You need to monitor it regularly.
You may also need to register if you expect your taxable turnover to go over the threshold in the next 30 days. If you are close to the limit, speaking to a VAT return accountant can help you understand whether you need to register, whether voluntary registration makes sense and how VAT would affect your pricing.
Prepare for Making Tax Digital
Making Tax Digital for Income Tax is now a major issue for many sole traders. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 must use MTD for Income Tax. From April 2027, this extends to those with qualifying income over £30,000.
This means digital records, compatible software and quarterly updates to HMRC. If your income is around these levels, the period before 5 April is a good time to tidy your records and avoid leaving everything until the new tax year begins.
A certified QuickBooks accountant can help you set up your records properly, connect bank feeds, categorise transactions and keep your figures ready throughout the year.
Review payroll if you employ anyone
Some sole traders employ staff without becoming a limited company. If that applies to you, make sure your payroll records are up to date before the tax year ends.
Check employee pay, deductions, pension contributions, starter and leaver details, and any benefits or reimbursements. Payroll mistakes can create problems for both you and your employees, especially around year-end reporting.
If payroll is becoming another job on top of your actual work, payroll accountant services in Slough can help you keep PAYE, National Insurance and pension duties under control.
Check whether your payments on account still make sense
Payments on account can catch many sole traders out. HMRC usually asks for advance payments towards your next tax bill if your last Self Assessment bill was above a certain level.
If your income has dropped, your payments on account may be too high. If your income has grown, they may not be enough. Either way, it is better to review this before you are under pressure.
A self-assessment tax return accountant can help you estimate your tax bill and decide whether you should reduce payments on account or save more for the next deadline.
Tidy your records before the deadline pressure starts
Good tax planning is much easier when your records are clean. Before 5 April, check that your invoices, receipts, bank transactions and mileage records are complete.
If you have mixed personal and business spending, separate it as clearly as possible. If you have used cash, make sure you have a record. If you changed bank accounts during the year, gather statements from both accounts.
This is where sole trader accounting support can save you time. Instead of trying to rebuild everything months later, you can get your records into shape while the details are still fresh.
Do not leave tax planning until January
January is the filing and payment deadline, but it is not the best time to start planning. By then, the tax year has already ended and most useful year-end actions are no longer available.
The better approach is to review your position before 5 April, then keep your records updated during the year. That way, you are not guessing your tax bill, rushing through receipts or finding out too late that something should have been handled differently.
Asmat & Co supports sole traders with bookkeeping, tax returns, VAT, payroll, QuickBooks and ongoing advice. Whether you need accountants for self-employed individuals or wider sole trader accounting services, the aim is simple: keep your accounts clear, compliant and easier to manage.
Final thoughts
Tax planning before 5 April does not need to be complicated. You need to know what you earned, what you spent, what you owe and what action still makes sense before the tax year closes.
A short review now can help you avoid missed expenses, cash flow surprises, VAT issues, MTD problems and last-minute Self Assessment stress.
If you want clear, practical support with your sole trader accounts, contact Asmat & Co Accountants today and book your free consultation. Their team can review your records, help you plan before 5 April and keep your tax affairs moving in the right direction.
Frequently asked questions
What should sole traders review before 5 April?
You should review your income, expenses, estimated profit, tax savings, pension contributions, VAT position, payroll records if you employ staff, and whether Making Tax Digital will apply to you. It is also a good time to check that your bookkeeping records are complete.
Can I reduce my tax bill before the tax year ends?
You may be able to reduce your tax bill by claiming all allowable business expenses, reviewing pension contributions and timing necessary business purchases properly. However, you should not spend money purely for tax reasons unless the purchase genuinely benefits your business.
Do sole traders need to keep receipts?
Yes. You should keep clear records of your income and business expenses. Receipts, invoices, bank statements and mileage logs can all support your tax return if HMRC ever asks for evidence.
When does a sole trader need to register for VAT?
You must register for VAT if your taxable turnover goes over the VAT threshold, which is currently more than £90,000 over a rolling 12-month period. You may also need to register if you expect to go over the threshold in the next 30 days.
Should I speak to an accountant before 5 April?
Yes, especially if your income has changed, your records are messy, you are close to the VAT threshold, you employ staff or you may be affected by Making Tax Digital. Speaking to an accountant before 5 April gives you more time to make sensible decisions before the tax year closes.
Need Help With Your Accounts Or Tax?
Whether you need support with self assessment, VAT returns, payroll, bookkeeping, CIS, company accounts or corporation tax, Asmat & Co Accountants can provide clear, practical advice for your business or personal finances.
