Guides
Do Sole Traders Need to File Accounts?
Updated 10 Jun 2026
Sole traders don't file accounts with Companies House. There are no statutory annual accounts, no confirmation statement and no company tax return. If you're a sole trader in the UK, your reporting goes to one place: HMRC. The yearly job is to keep records of your business income and expenses, then report them on a Self Assessment tax return. This page covers exactly what's required, the deadlines, and how to check you really are a sole trader and not a limited company.
Do sole traders file anything with Companies House?
No. Companies House is the register of limited companies, and a sole trader isn't on it. The deadlines you may have read about for filing company accounts belong to limited companies and don't apply to you.
If you're not certain which one you are, you can settle it in two minutes: search the free Companies House register for your name and your business name. A limited company only exists if someone registered one there. No registration, no company.
There's a naming rule that makes the check easier: a sole trader's trading name must not include "limited", "Ltd", "LLP" or "plc". A business name that looks like a company name belongs to an actual registered company.
What does a sole trader have to do?
Four jobs, all with HMRC:
| Job | Deadline | Detail |
|---|---|---|
| Register for Self Assessment | 5 October after the end of the tax year you started trading in | Required once you earn more than £1,000 of gross trading income in a tax year (6 April to 5 April) |
| File your tax return | 31 January online (31 October if filing on paper) | Covers the tax year just ended |
| Pay your tax | 31 January, plus 31 July where instalments apply | Income tax and National Insurance, worked out from your return |
| Keep records | Hold them for at least 5 years after the 31 January deadline | Income and expense records that back up the figures on your return |
A note on that £1,000: it's gross income (your takings before any expenses), not profit. Below it, you don't need to register for the trade at all.
The one that catches new sole traders is payments on account. Once your tax bill reaches £1,000 (and most of your tax isn't collected through a tax code), HMRC asks for two advance instalments towards the following year: half on 31 January and half on 31 July. So the first 31 January after a good opening year brings the year's bill plus half of it again, on the same day. Knowing that months ahead turns it into a savings target instead of a shock.
What about Making Tax Digital?
Making Tax Digital (MTD) for Income Tax is being phased in by income. You're brought in once your gross income from self-employment and property is more than £50,000 (from 6 April 2026), more than £30,000 (from 6 April 2027) or more than £20,000 (from 6 April 2028). The test uses turnover before expenses, not profit.
MTD changes how you report, and that's all. You keep digital records and send HMRC a short update each quarter, by 7 August, 7 November, 7 February and 7 May. Each update is a running summary of income and expenses rather than a tax return, and nothing is owed when you send one. You still complete and submit your tax return through your software by 31 January, and the payment dates stay exactly where they are.
HMRC writes to people who cross the threshold, but checking remains your responsibility, so it's worth knowing your gross income figure each year.
What if there's a company registered in your name?
Some people form a company early (often just to hold the name) and then trade as a sole trader anyway. If that's you, you have both sets of obligations: Self Assessment for your trading, and company filings for the company. A company that has never traded still has to file dormant company accounts and a confirmation statement every year. If the company is the thing that's actually trading, start with company accounts instead.
Still unsure which you are? Sole trader or limited company settles it properly, including what each one has to file.
Frequently asked questions
Do sole traders need to prepare annual accounts? Not statutory ones. There's no required format and nothing gets filed at Companies House. You need records good enough to complete your Self Assessment return accurately, and many sole traders keep a simple profit-and-loss summary for their own decisions (and the occasional mortgage application).
Do sole traders file with Companies House at all? No. Companies House holds the register of limited companies. A sole trader files nothing there and doesn't appear on the register.
Is Self Assessment the same as a company tax return? No. Self Assessment is your personal tax return; a Company Tax Return (the CT600) belongs to a limited company. Sole traders file only the first. The two get mixed up constantly — Self Assessment vs company tax return untangles them.
What happens if I file my Self Assessment late? A £100 penalty straight away, with more added the longer the return stays outstanding, plus interest on any tax paid late. The penalty system is changing from April 2027 to a points-based one. Either way the answer is the same: file as soon as you can, and if paying is the problem, contact HMRC early about a payment plan.
Do I need an accountant as a sole trader? It isn't a legal requirement, and plenty of sole traders file their own return. Paying for help starts to make sense when your affairs get more involved, when MTD brings in quarterly reporting, or when you'd rather spend the time on the business. Do I need an accountant? goes through it honestly.
I registered a company but never used it. Do I have to do anything? Yes. Even a company that has never traded must file dormant accounts and a confirmation statement each year. See dormant company accounts.
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