Free accounting software for sole traders

A sole trader is a self-employed individual who runs their own business and is personally responsible for its income, expenses, and taxes. You must be registered as a sole trader with HMRC if your earnings during the tax year exceed £1,000. As a sole trader, you must keep accurate records of your finances and report your income through Self-Assessment to HMRC each year.

If you are registered as a sole trader with HMRC, you may need to report your income through either Self Assessment or Making Tax Digital (MTD) for Income Tax, depending on your income level and the tax year.

From April 2026, if your annual income is more than £50,000, you are required to follow MTD for Income Tax rules. This means keeping digital records and submitting your income tax information using MTD-compatible accounting software instead of manually completing the return in the old way.

If your annual income is below £50,000, you can continue using Self Assessment (SA100 and SA103S) and submit your tax return in the usual way.

HMRC's Making Tax Digital (MTD) for Income Tax initiative empowers sole traders to maintain digital records of their business transactions and simplify income tax filing with the help of online accounting software. From April 2026, sole traders with an annual income over £50,000 must submit their income tax returns with HMRC-recognised accounting software.

Yes, Zoho Books offers a free plan for sole traders to help streamline their accounting processes and ensure compliance with government regulations. The plan includes:

• Digital records with audit trails to ensure accuracy and transparency.
• Preparation for self-assessment (SA103F, SA103S)
• Income tax filing for sole traders.
• Direct VAT filing to HMRC.

...and more.

To complete your self-assessment tax return, you must report your business income and expenses to HMRC. Zoho Books automatically tracks your earnings and expenses and helps you prepare quarterly updates for your sole trader business. You can review and share it with your accountant or use it to file directly with confidence.

Our free plan helps VAT- and non-VAT-registered sole traders submit income tax returns directly to HMRC. However, as your business grows and graduates to an LLP or limited company, we have many other plans that might work for you. If you are already looking for some advanced features, view our pricing plans to find out what works best for you.

Yes, you can have your accountant handle your income tax returns. Our free plan gives both you and your accountant full access to your Zoho Books account. If you need an accountant, you can easily find one nearby to support you with your MTD requirements here.

If you are an accountant or a bookkeeper with your own firm, we also offer a practice management solution for bookkeepers and accounting firms through Zoho Practice, which seamlessly integrates with the Zoho Books accounting platform. This integration makes it easier to capture your clients financial insights directly within your practice dashboard and manage them efficiently from a single place. Become a partner to discover additional benefits for your company and clients.

Absolutely. Zoho Books makes it easy to import your existing spreadsheet data, including contacts, transactions, and account balances. Our tech team can assist you in migrating your data to Zoho Books, ensuring a smooth and secure transition.

If you would like a guided walkthrough of the platform, you can book a free one-on-one demo with our product experts by emailing us at support.uk@eu.zohobooks.com. We will help you get started and make the switch to Zoho Books effortless

The self-assessment deadline for the 2024/25 tax year is 31 January 2026 for online submissions.

If you're filing a paper tax return, the deadline is earlier: 31 October 2025.

Make sure to keep track of your income and expenses throughout the year using Zoho Books to make filing your self-assessment return easier and meet the deadline without stress.