Year-End Tax Checklist for Sole Traders (2025/26)

The Accounted Tax Team·15 March 2026·7 min read

Year-End Tax Checklist for Sole Traders (2025/26)

The 2025/26 tax year ends on 5 April 2026. That's your deadline for making sure everything is in order — expenses claimed, income recorded, and tax-saving opportunities seized before the window closes.

Your Accounted dashboard shows your real-time tax position

Whether you've been diligently tracking everything all year or you're only now thinking about it (no judgement), this checklist will walk you through everything you need to do before the year end.

1. Review All Your Income Sources

Start with the basics. Make sure you've recorded all income for the tax year — not just your main client or revenue stream.

Common sources people forget:

One-off freelance gigs or side projects
Cash payments (yes, these still count)
Interest on business savings accounts
Grants or business support payments
Referral fees or affiliate income
Income from selling assets or equipment

HMRC expects you to declare everything. Missing income sources is one of the most common triggers for an enquiry, so be thorough.

2. Chase Outstanding Invoices

If you use cash basis accounting (which most sole traders under £150,000 turnover do), you only declare income when it's actually received. An invoice issued in March but paid in April falls into the next tax year.

Whether you chase or wait depends on your situation. If your profits are lower this year, getting paid before 5 April uses more of your basic-rate band. If profits are higher, letting income fall into next year might be smarter. Check our invoicing guide for tips on getting paid promptly.

3. Claim All Allowable Expenses

This is the big one. Every legitimate business expense you haven't yet recorded is tax relief you're leaving on the table.

Go through your bank statements, receipts, and records for the full year. Common expenses sole traders miss:

Working from home — simplified rate (up to £312/year) or actual costs (often much more)
Professional subscriptions — trade bodies, professional memberships
Software and tools — accounting software, design tools, cloud storage
Training and courses — that update or maintain your existing skills
Business insurance — public liability, professional indemnity
Bank charges and interest — on your business account
Marketing costs — website hosting, domain names, advertising
Travel — fuel, train tickets, parking for business journeys (not commuting)
Phone costs — the business proportion of your mobile bill

We have a comprehensive list of sole trader expenses if you want to make sure you haven't missed anything.

4. Do a Stock Take (If Applicable)

If you sell physical products, value your stock as at 5 April 2026 at the lower of cost or net realisable value. Write down damaged or unsellable stock to its realistic selling price.

5. Capital Allowances: Buy Before 5 April

If you've been thinking about buying equipment, a laptop, tools, or other business assets — do it before 5 April to claim the deduction in this tax year.

The Annual Investment Allowance (AIA) lets you deduct the full cost of qualifying equipment up to £1,000,000 in the year you buy it. For most sole traders, this means any equipment purchase is fully deductible immediately.

This includes:

Computers and laptops
Office furniture
Tools and machinery
Vehicles (with some restrictions for cars)

Buy that new laptop on 4 April and you claim it against 2025/26 profits. Wait until 6 April, and it's next year's deduction. But don't buy things you don't need just for the tax saving — a £1,000 purchase at 20% only saves £200.

6. Pension Contributions

Pension contributions are one of the most powerful tax-reduction tools available, and the deadline for 2025/26 relief is 5 April 2026.

As a sole trader, you can contribute up to £60,000 per year (or 100% of your earnings, whichever is lower) to a personal pension and receive full tax relief.

If you're a basic-rate taxpayer, your pension provider claims the 20% relief automatically. If you're a higher-rate taxpayer, you claim the additional 20% through your Self Assessment return.

Example: A £10,000 pension contribution for a higher-rate taxpayer saves £4,000 in tax (plus reduces your Class 4 NI liability). And the money is invested for your future.

If you haven't used your full allowance in previous years, you may be able to carry forward unused relief from the last three tax years. This is worth investigating if you've had a particularly profitable year.

7. Gift Aid Donations

If you've made charitable donations during the year, make sure they're recorded. Gift Aid donations extend your basic-rate band, which can reduce your higher-rate tax liability. A £2,000 Gift Aid donation on income of £55,000 could save you an extra £500. Make sure you have Gift Aid declarations from each charity.

8. Check Your Tax Code for Next Year

If you have employment income alongside your self-employment (or you have income collected through PAYE coding), check the tax code HMRC has assigned for 2026/27.

Incorrect tax codes are surprisingly common. Look out for old benefits still included after leaving employment, payments on account being collected through your code, and estimated untaxed income that's wildly inaccurate. Check via your Personal Tax Account on the HMRC website.

9. Prepare for Making Tax Digital

If this is your first year of Making Tax Digital for Income Tax, you'll need to start quarterly submissions from April 2026. Make sure you have HMRC-compatible software set up, your digital records in order, and you understand the new penalty regime. Don't leave setup until April.

10. Reconcile Your Bank Accounts

Before closing out the year, reconcile your business bank account. Every transaction should be categorised and matched. Look for:

Uncategorised transactions
Personal expenses accidentally paid from the business account (and vice versa)
Standing orders or subscriptions you've forgotten about
Bank charges you haven't claimed as expenses

A clean bank reconciliation makes your Self Assessment filing dramatically easier and reduces the risk of errors.

11. Back Up Your Records

HMRC requires you to keep records for at least 5 years after the filing deadline. For 2025/26, that means until at least 31 January 2032. Make sure everything is backed up securely — you'll need digital records for MTD anyway.

How Accounted Generates Your Year-End Summary

If you've been using Accounted throughout the year, much of this checklist is already done. Your income and expenses are tracked, your bank transactions are reconciled, and your tax position is calculated in real time.

At year end, Accounted generates a comprehensive summary that includes:

Total income by source and category
Complete expense breakdown with supporting receipts
Working from home deduction (both methods calculated, so you can pick the best)
Capital allowances claimed
Estimated tax and National Insurance liability
Comparison to previous year

Everything you need for your Self Assessment return — or to hand to your accountant — in one place. No year-end scramble, no missing receipts, no guesswork.

The Bottom Line

Year-end tax planning isn't about finding clever loopholes. It's about making sure you claim everything you're entitled to, time your purchases and contributions wisely, and go into the new tax year with clean, accurate records.

The best time to start this checklist was January. The second-best time is now. Work through it methodically, and you'll head into 2026/27 with confidence — and a lower tax bill.

Ready to simplify your bookkeeping? Try Accounted free for 14 days →

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Year-End Tax Checklist for Sole Traders (2025/26)