The Receipt Scanner Built for UK Sole Traders
Snap receipts, track mileage at HMRC rates, organise by tax quarter, and export SA103F-ready reports. Everything a self-employed person needs to keep accountant-ready records.
The sole trader receipt problem
The shoebox method
Paper receipts stuffed in a drawer. Half faded, half lost. Tax time becomes a panic.
January deadline stress
Scrambling to find 12 months of expenses the week before Self Assessment is due.
Spreadsheet chaos
Manual entry into Excel. Wrong categories. No VAT breakdown. No HMRC alignment.
Unclaimed mileage
Business trips you drove but never logged. At 55p per mile, that adds up fast.
Every feature a sole trader needs
AI Receipt Scanning
Snap a photo. AI extracts store, amount, date, VAT, and category. 11 data quality checks before saving.
Mileage Tracking
GPS or manual entry. HMRC approved 55p/25p rates. Track per vehicle with AMAP or actual cost method.
HMRC Tax Categories
Every expense maps to the correct SA103F Self Assessment box. No guessing which category to use.
Quarterly Periods
Records organised by tax quarter automatically. Ready for Making Tax Digital when it arrives.
Export to 10 Platforms
CSV and PDF exports formatted for Xero, FreeAgent, QuickBooks, Sage, and 6 more. Plus direct accountant sharing.
Tax Forecast
See your estimated Income Tax and National Insurance in real-time. Watch how each expense reduces your bill.
Three steps. That's it.
Snap
Take a photo of your receipt. AI reads it in seconds.
Categorise
Review the details, pick the HMRC category, save.
Export
At tax time, export everything — organised, categorised, ready.
Built for UK tax rules
Allowable expenses for UK sole traders
HMRC lets you deduct any cost that is wholly and exclusively for your business. The table below maps the spend most sole traders see year-after-year to the boxes on SA103F (the full self-employment pages of your Self Assessment). The relief is the same whether you fill in SA103F or the shorter SA103S — only the box numbers differ.
| Expense | Claim? | SA103F box | Notes |
|---|---|---|---|
| Stock, raw materials, goods bought to resell | Yes | Box 17 — Cost of goods bought for resale or goods used | Anything you sold on, or used up directly on a job. |
| Wages or subcontractor payments | Yes | Box 19 — Wages, salaries and other staff costs | Payments to yourself are not allowable — you are not an employee of your own business. |
| Mileage in your own car or van (simplified rate) | Yes | Box 20 — Car, van and travel expenses | 55p first 10,000 business miles, 25p after that. Motorcycles 24p. |
| Vehicle running costs — insurance, MOT, servicing, fuel (actual-cost method) | Yes | Box 20 | Only if you are not using simplified mileage on the same vehicle. |
| Train, bus, taxi, parking on business trips | Yes | Box 20 | Business travel only, not commuting from home to a regular workplace. |
| Business use of home — flat rate | Yes | Box 21 — Rent, rates, power and insurance costs | £10 / £18 / £26 a month for 25–50 / 51–100 / 101+ hours business use. |
| Public liability, professional indemnity, contents insurance | Yes | Box 21 | Annual premiums in full. |
| Repairs to business equipment | Yes | Box 22 — Repairs and maintenance of property and equipment | Replacing parts and fixing existing kit. Buying replacement equipment goes elsewhere. |
| Mobile phone bill (business proportion) | Partly | Box 23 — Phone, fax, stationery and other office costs | Estimate honestly. 50–80% is typical for most sole traders. |
| Software subscriptions, accounting apps, cloud storage | Yes | Box 23 | Monthly subs allowable — keep the email receipt. |
| Stationery, postage, printer ink, business cards | Yes | Box 23 | Day-to-day office consumables. |
| Advertising — Google Ads, Facebook Ads, leaflets, website costs | Yes | Box 24 — Advertising and business entertainment costs | Business entertainment (client meals, gifts) is not allowable. |
| Bank charges, credit-card processing fees, Stripe/PayPal/Square fees | Yes | Box 26 — Bank, credit card and other financial charges | Use a business account so charges are clearly separable. |
| Accountant or bookkeeper fees | Yes | Box 28 — Accountancy, legal and other professional fees | Including the cost of preparing your tax return. |
| Trade body subscriptions, refresher training, branded uniform / PPE | Yes | Box 30 — Other business expenses | Refresher training in your existing trade only — new-trade training is not allowable. |
| Plain everyday clothing (even if only worn for work) | No | — | HMRC: "you cannot claim for everyday clothing (even if you wear it for work)." |
| Lunch and food on a normal working day | No | — | Subsistence is only allowable on overnight trips away from your normal area. |
| Speeding fines, parking penalties | No | — | Fines are never allowable. |
| Pension contributions to your own personal pension | No | — | Not a business expense — claim personal pension relief through Self Assessment instead. |
| Equipment with a useful life over 2 years (laptop, camera, machinery) | Yes | Box 49 — Annual Investment Allowance (traditional accounting) | Under cash basis (default since 6 April 2024) include with other expenses; under traditional accounting claim via AIA, up to £1,000,000 a year. |
Box numbers from HMRC SA103F Notes 2026. Filing the shorter SA103S? Boxes 11–19 map to the same categories and Box 23 is the AIA equivalent.
Emma, a Bristol graphic designer earning £42,000
The setup
Emma is 34, freelance, and lives in Bristol. Most of her work is brand identity and packaging design for small UK consumer brands. Turnover for 2025–26 is £42,000. She works from a spare bedroom four days a week and rents a coworking day pass on Wednesdays. She drives 1,400 business miles a year to client meetings and press checks.
What she claims at year end
Tracked through PocketReceipt as she went:
The maths
Gross turnover £42,000 minus £7,176 of expenses leaves a taxable profit of £34,824. After the £12,570 personal allowance, £22,254 falls in the basic-rate band. Income Tax at 20% is £4,451. Class 4 NICs at 6% on profits between £12,570 and £50,270 add £1,335. Total tax due: £5,786.
What it would have cost without the records
If Emma had only claimed the obvious — her laptop and the Adobe subscription, say £2,200 — her taxable profit would be £39,800. Income Tax would be £5,446 and Class 4 NICs £1,634, total £7,080. The records save her £1,257 a year — and the picture gets bigger as her income climbs into the higher-rate band.
Common tax mistakes UK sole traders make
- Missing the 5 October registration deadlineIf you became self-employed in the 2025–26 tax year you must tell HMRC by 5 October 2026. HMRC can charge a "failure to notify" penalty calculated as a percentage of the tax due. Registration is free and takes around 15 minutes online.
- Claiming the £1,000 trading allowance AND actual expensesIt is one or the other, not both. If your real allowable expenses are more than £1,000 (almost every sole trader), claim actual expenses and ignore the allowance. Only use the trading allowance if your expenses are genuinely under £1,000.
- Mixing personal and business accountsHMRC does not require a separate business account, but mixing the two makes a tax-return reconstruction painful and looks untidy if HMRC ever queries the return. A free e-money business account opens in ten minutes.
- Claiming 100% of your phone billIf you use the phone for anything personal — and you do — only the business proportion is allowable. Estimate honestly. HMRC accepts a reasonable split, typically 50–80%.
- Mileage method lock-inOnce you pick simplified mileage (55p / 25p) for a vehicle, you cannot switch to actual costs on that vehicle later. Model both before deciding. Switching also costs you the right to claim capital allowances on that vehicle.
- Treating own pension contributions as a business expensePersonal pension contributions are not allowable as a business expense. The relief is given through Self Assessment as personal pension relief, separate from your profit calculation.
- Forgetting the working-from-home flat rateIf you spend at least 25 hours a month working from home — admin, invoicing, quoting, replying to customers — you can claim £10, £18 or £26 a month depending on hours. Most full-time sole traders hit 101+ hours easily.
- Not understanding payments on accountIf your tax bill is over £1,000, HMRC asks for 50% of next year's bill on 31 January, and another 50% on 31 July. First year of trading hits hardest because you pay last year + next year's instalment at the same time.
- Plain clothes claimed as "uniform"HMRC's rule is explicit: everyday clothing is never allowable, even if you only wear it for work. Branded uniform, PPE, costumes for actors and entertainers — yes. Plain trousers and T-shirts — no.
- Not registering for VAT when crossing £90,000Watch the rolling 12-month total. You must register if turnover exceeds £90,000 in any rolling 12-month period — not just in the tax year. Late registration brings penalties and back-VAT on sales you didn't add VAT to.
- Missing payment-processor feesStripe, PayPal, Square, GoCardless and card-machine fees are all allowable (Box 26). On a £42k revenue those fees easily total £400–£600 a year — pure expense relief if you actually claim them.
Year-end tax tips for sole traders
- Bring forward big purchases before 5 AprilA new laptop, camera, machinery or van completed before 5 April pulls the deduction into the current tax year. Under cash basis (the default since 6 April 2024) it goes in with other expenses. Under traditional accounting it goes through Annual Investment Allowance, up to £1,000,000 a year.
- Reconcile your personal-card business spendsPull a bank statement export and tag every business spend on personal cards before 31 January. The receipts are still deductible as long as you can prove the purchase. Most sole traders find £200–£600 of "lost" expenses this way.
- Check the Class 4 NIC band crossingFor 2025–26 Class 4 NICs are 6% on profits between £12,570 and £50,270, then 2% above. If you are close to £50,270, an extra purchase before year-end can shift a chunk of profit out of the 6% band.
- Decide simplified vs actual on your vehicle — onceCheap-to-run car or van with high mileage: simplified usually wins. Newer vehicle with high insurance and depreciation: actual cost plus capital allowances often wins. Model both before choosing because the choice is locked in for that vehicle's working life with the business.
- Get ready for MTD for Income TaxFrom 6 April 2026, sole traders with combined self-employment + property income over £50,000 must file quarterly cumulative updates to HMRC. The first quarterly update for 2026–27 is due 7 August 2026, then 7 November, 7 February and 7 May, plus a Final Declaration on 31 January 2028. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
- Keep records for 5 years after the filing deadlineHMRC requires you to keep your business records for at least 5 years after the 31 January submission deadline for the relevant tax year. Digital records are fine — that's what the app keeps.
- File early after 6 April if you expect a refundSelf Assessment for the new year opens on 6 April. If you have CIS deductions taken at source, or you overpaid through PAYE during the year, filing early means HMRC pays the refund in May or June rather than the following January.
Sole-trader FAQ
When do I need to register as a sole trader?
If your self-employment income for a tax year exceeds £1,000 you must register with HMRC for Self Assessment. The deadline is 5 October following the end of the tax year in which you crossed the threshold. So for income earned in 2025–26 (6 April 2025 to 5 April 2026), the registration deadline is 5 October 2026.
What's the difference between cash basis and traditional accounting?
Cash basis: income and expenses are recorded when the money actually moves. Traditional accounting (also called accruals): income and expenses are recorded when invoiced or incurred, regardless of when paid. Since 6 April 2024 cash basis is the default for sole traders — simpler for most. You can choose traditional accounting if it suits you better; the choice is made on your tax return each year.
How long do I need to keep my receipts?
HMRC requires you to keep your business records for at least 5 years after the 31 January submission deadline of the relevant tax year. Digital copies are acceptable — you don't need to keep the paper. For very late returns (more than 4 years after the original deadline) the period extends to 15 months after the late submission.
Do I need to register for VAT?
Only if your taxable turnover exceeds £90,000 in any rolling 12-month period — not just in the tax year. Watch the rolling total. Many sole traders stay under and never need to register. You can voluntarily register below the threshold if you mainly sell to other VAT-registered businesses.
What about National Insurance?
Class 4 NICs are 6% on profits between £12,570 and £50,270, then 2% above £50,270 for 2025–26. Class 2 NICs are still counted toward your State Pension record, but if your profits are above the small profits threshold (£6,845 for 2025–26) you don't pay them — HMRC treats them as paid automatically.
When are my Self Assessment deadlines?
For the 2025–26 tax year: register by 5 October 2026; paper return by 31 October 2026; online return and balancing payment by 31 January 2027; first payment on account (if your bill is over £1,000) also 31 January 2027; second payment on account 31 July 2027. From 6 April 2026, sole traders with combined self-employment + property income over £50,000 also file MTD ITSA quarterly updates.
Sole trader or limited company — which is better?
It depends on profit. Below roughly £30,000–£40,000 of profit a year, sole trader is usually simpler and similarly taxed. Above that, a limited company can be more tax-efficient because of the salary-plus-dividends split and Corporation Tax rates. Use our sole trader vs limited calculator to model both for your numbers.
HMRC and PocketReceipt references used on this page
- HMRC, Set up as a sole trader
- HMRC, Register as a sole trader
- HMRC, Self Assessment deadlines
- HMRC, Business records for the self-employed
- HMRC, How long to keep your records (5 years rule)
- HMRC, Expenses if you're self-employed — overview
- HMRC, Clothing expenses
- HMRC, Cash basis accounting (the default since April 2024)
- HMRC, Simplified mileage rates (55p / 25p / 24p)
- HMRC, Simplified expenses — working from home rates
- HMRC, Annual Investment Allowance
- HMRC, Self-employed National Insurance rates
- HMRC, Making Tax Digital for Income Tax — sole traders and landlords
- HMRC, SA103F Notes 2026 — Self-employment (full) (PDF)
- PocketReceipt, Mileage calculator · VAT threshold calculator · Sole Trader vs Ltd · MTD Forecaster
- PocketReceipt, Sole-trader allowable expenses — full guide · Simplified vs actual costs · MTD ITSA quarterly checklist
Worked example figures are illustrative. Tax rates use 2025–26 thresholds: personal allowance £12,570; basic-rate Income Tax 20%; Class 4 NICs 6% on profits between £12,570 and £50,270, 2% above. PocketReceipt is a record-keeping app, not a tax adviser — speak to an accountant for advice on your situation.
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