Contractor money starter pack: United Kingdom
What GOV.UK says about the trading allowance, registering for Self Assessment, VAT and invoices.
Check with a tax adviser. This page is general information from official pages, not tax or legal advice, and it can't tell you what applies to your situation.
Last checked 25 Oct 2026 against the official pages linked under each line.
The trading allowance
- GOV.UK: “The trading allowance is a tax exemption of up to £1,000 a year.” If your annual gross trading income is £1,000 or less, GOV.UK says you may not have to tell HMRC, with exceptions.Source: GOV.UK (HMRC), Tax-free allowances on property and trading income · read 25 Oct 2026
- GOV.UK's official checker tells you whether you need to send a tax return. GOV.UK says the tool will not send your details to HMRC.Source: GOV.UK (HMRC), Check if you need to send a Self Assessment tax return · read 25 Oct 2026
Registering as self-employed
- GOV.UK says to register for Self Assessment if your self-employment income is more than £1,000 in a tax year. The tax year runs from 6 April to 5 April. You can register earlier.Source: GOV.UK, Set up as a sole trader · read 25 Oct 2026
- The deadline GOV.UK gives is 5 October after the end of the tax year: 5 October 2026 for the tax year that ended on 5 April 2026. Telling HMRC late may lead to a penalty.Source: GOV.UK (HMRC), Register for Self Assessment · read 25 Oct 2026Source: GOV.UK (HMRC), Tax-free allowances on property and trading income · read 25 Oct 2026
- GOV.UK: “You may need to pay Income Tax on your profits and may need to pay National Insurance contributions.” It also says that when you start trading you must keep records.Source: GOV.UK, Set up as a sole trader · read 25 Oct 2026
VAT and Making Tax Digital
- VAT: GOV.UK says you must register if your total taxable turnover for the last 12 months goes over £90,000.Source: GOV.UK (HMRC), VAT registration: when to register · read 25 Oct 2026
- Making Tax Digital for Income Tax: GOV.UK sets the qualifying income at £50,000 (for the 2024 to 2025 tax year, use from 6 April 2026), £30,000 (2025 to 2026, from 6 April 2027) and £20,000 (2026 to 2027, from 6 April 2028).Source: GOV.UK (HMRC), Check if you're eligible for Making Tax Digital for Income Tax · read 25 Oct 2026
Invoice template
The fields below are GOV.UK's list of what an invoice must include, plus the two extra lines it lists for sole traders. If you are VAT registered, GOV.UK has a separate page on VAT invoices (your VAT number and the VAT amount shown separately).
| Field | Where it comes from |
|---|---|
| A unique identification number | Official list |
| Your name and any business name you use | Official list |
| An address where legal documents can be delivered to you | Official list (if you use a business name) |
| Your address and contact information | Official list |
| The name and address of the customer you're invoicing | Official list |
| A clear description of what you're charging for | Official list |
| The date the service was provided (supply date) | Official list |
| The date of the invoice | Official list |
| The amount(s) being charged | Official list |
| VAT amount | Official list (if applicable) |
| Your VAT number | Official list (if you are VAT registered) |
| The total amount owed | Official list |
| Payment terms and how to pay | Common practice |
Source: GOV.UK, Invoicing and taking payment from customers: invoices, what they must include · read 25 Oct 2026Source: GOV.UK (HMRC), VAT record keeping: VAT invoices · read 25 Oct 2026
What this page doesn't cover
- Scotland's and Wales's own Income Tax rates
- National Insurance classes and amounts
- Allowable expenses
- Income from outside the UK
Check with a tax adviser. This page is general information from official pages, not tax or legal advice, and it can't tell you what applies to your situation.
How we checked this
Last checked 25 Oct 2026. We read each page below on the date shown and quote it rather than paraphrase where the wording matters. We read these pages again each January and April, and whenever one of them changes.
- Tax-free allowances on property and trading incomeGOV.UK (HMRC) · Last updated 8 May 2019 · read 25 Oct 2026
- Check if you need to send a Self Assessment tax returnGOV.UK (HMRC) · Covers the 2025 to 2026 tax year · read 25 Oct 2026
- Set up as a sole traderGOV.UK · No date shown on the page · read 25 Oct 2026
- Register for Self AssessmentGOV.UK (HMRC) · No page date; the deadline it gives is 5 October 2026 for the 2025 to 2026 tax year · read 25 Oct 2026
- VAT registration: when to registerGOV.UK (HMRC) · No date shown on the page · read 25 Oct 2026
- Check if you're eligible for Making Tax Digital for Income TaxGOV.UK (HMRC) · Last updated 26 March 2026 · read 25 Oct 2026
- Invoicing and taking payment from customers: invoices, what they must includeGOV.UK · No date shown on the page · read 25 Oct 2026
- VAT record keeping: VAT invoicesGOV.UK (HMRC) · No date shown on the page · read 25 Oct 2026
Official pages change: if a page says something different from this one, the official page is right.