Tax Year End 2026: Complete Checklist for UK Freelancers & Sole Traders
Published 24 February 2026 · Updated 12 March 2026Once 5 April passes, you can't backdate expense claims, pension contributions, ISA allowances, or capital allowances. Every pound you miss costs you 20-45% in unnecessary tax.
This is your complete action plan. Print it, work through it, and save yourself hundreds (or thousands) before the deadline.
1. Claim All Business Expenses (Before 5 April)
Review your bank statements for the entire tax year (April 2025 – March 2026). You're looking for:
- Recurring subscriptions — software, tools, hosting, professional memberships
- One-off purchases — equipment, furniture, courses
- Travel — mileage (45p/mile for first 10,000), public transport, accommodation
- Marketing — website, ads, business cards, domain names
- Professional fees — accountant, insurance, legal
Commonly Forgotten Expenses
- Mobile phone (business use portion)
- Internet (business use portion)
- Home office — simplified method: £6/week (£312/year), no receipts needed
- Professional insurance (PI, public liability)
- Bank charges and PayPal fees
- Bad debts (unpaid invoices you've written off)
- Repairs and maintenance of business equipment
2. Capital Allowances (Annual Investment Allowance)
Bought equipment for your business? Claim 100% of the cost under the Annual Investment Allowance (up to £1 million).
| Tax Band | Equipment Cost | Tax Saved |
|---|---|---|
| Basic rate (20%) | £2,000 laptop | ~£600 (IT + NI) |
| Higher rate (40%) | £2,000 laptop | ~£1,000 (IT + NI) |
Strategic tip: If you're planning to buy business equipment anyway, buy it before 5 April 2026 to claim the tax relief this year.
3. Pension Contributions (The Biggest Tax Saver)
Pension contributions are one of the most tax-efficient ways to reduce your bill. You can contribute up to £60,000/year and receive full tax relief.
| Your Profit | Pension Contribution | Tax Saved |
|---|---|---|
| £50,000 (basic rate edge) | £5,000 | ~£1,450 |
| £60,000 (higher rate) | £5,000 | ~£2,450 |
| £100,000+ (Personal Allowance trap) | £10,000 | ~£6,000+ |
4. ISA Contributions (£20,000 Tax-Free)
Move up to £20,000 into an ISA before 5 April to earn interest completely tax-free. The allowance doesn't roll over — use it or lose it.
If you've got cash reserves sitting in a regular savings account, you're paying tax on that interest unnecessarily.
5. Chase Outstanding Invoices & Write Off Bad Debts
If you're on cash basis accounting (most sole traders are), income counts when you're paid, not invoiced. But you should still:
- Send invoices for all work completed before 5 April
- Chase overdue invoices — every pound collected this tax year reduces next year's bill
- Write off genuinely bad debts as an expense (reduces your taxable profit)
Need help with late-paying clients? See our guide to freelancer late payment rights.
6. VAT Threshold Check (£90,000)
If your turnover is approaching £90,000 in any rolling 12-month period, you must register for VAT within 30 days. If you're just under, consider deferring invoices until after 5 April.
7. Loss Relief Planning
If your business made a loss in 2025/26, you can:
- Carry it forward against future profits
- Carry it back to 2024/25 and claim a tax refund
- Offset against other income (employment, rental) in 2025/26
8. MTD Preparation (Starts 6 April)
Making Tax Digital for Income Tax begins the day after tax year end. If you earn over £50,000, you need:
- MTD-compatible software chosen and set up
- Digital record-keeping system ready
- Government Gateway linked to your software
Good news: there's a first-year penalty exemption on late quarterly submissions.
Your Tax Year-End Timeline
Review all bank statements. Categorise expenses. Total income. Identify missing receipts. Calculate estimated tax bill.
Claim all business expenses. Calculate capital allowances. Plan pension + ISA contributions. Chase outstanding invoices. Write off bad debts.
Make pension contributions. Fund ISA. Send final invoices for work completed. Finalise expense claims.
New tax year begins. MTD for Income Tax starts (£50k+). Nothing more you can do for 2025/26.
The Printable Checklist
Income & Expenses
- Review all bank statements (April 2025 – March 2026)
- Categorise all business expenses by HMRC category
- Total all income
- Calculate profit (income minus expenses)
- Ensure all receipts are saved digitally
Capital Allowances
- List all equipment purchased in 2025/26
- Claim Annual Investment Allowance
- Make any planned equipment purchases before 5 April
Pension & ISA
- Decide pension contribution amount
- Set up payment before 5 April 2026
- Open/fund ISA (up to £20,000) before 5 April
Invoicing & Payments
- Invoice all completed work
- Chase overdue invoices
- Write off bad debts
VAT & NI
- Check if turnover exceeds £90,000 VAT threshold
- Estimate Class 2 + Class 4 NI bills
Tax Estimate
- Calculate estimated Income Tax bill
- Calculate estimated NI bill
- Set aside money for January 2027 payment
- Review payments on account for 2026/27
📊 Track Everything in One Place
Our Tax Tracker Spreadsheet is pre-built with all HMRC expense categories, quarterly summaries, and tax estimate formulas. Set up in 5 minutes — use it to work through this checklist.
Get the Tax Tracker — £7 →🧰 Full MTD Readiness Toolkit
Everything you need for both the tax year end AND Making Tax Digital: expense tracker, compliance checklist, quarterly submission templates, and step-by-step setup guide.
Get the MTD Toolkit — £14 →Further Reading
- Complete Guide to Allowable Expenses for the Self-Employed
- Self-Employed Tax: Worked Examples at Every Income Level
- MTD Penalty Exemption: First Year Grace Period
- Payments on Account Explained
- Working from Home Tax Relief Guide
This guide is for informational purposes only and does not constitute financial or legal advice. Tax rules and thresholds are based on 2025/26 tax year. Consult a qualified tax adviser for your specific situation.