Accounting services
Self assessment for motor traders and directors
Motor Trade Accounting helps sole traders, partners and company directors in the motor trade across the UK get their self assessment tax returns done properly. Profits worked out correctly, expenses claimed, and deadlines met.
Who needs a self assessment return
Self assessment is how HMRC collects income tax that is not taken through payroll. In the motor trade that covers sole-trader mechanics, car traders, valeters and recovery drivers, partners in a garage partnership, and many limited company directors who take dividends. Anyone with trading income above the trading allowance, or untaxed income such as dividends or rent above certain levels, generally needs to register and file.
For self-employed traders the return reports the business profit for the tax year, with income tax and Class 4 National Insurance worked out on it. Since the 2024 to 2025 tax year, profits are taxed on a tax-year basis rather than on an accounting year that ends within it, and the cash basis is now the default way for sole traders and partnerships to work out profit, although some businesses with significant stock are better off opting out.
Specialist help makes sure the profit figure is right, the right expenses and allowances are claimed, and the payment dates are planned for. For directors, it means looking at salary, dividends and the company together, so the personal and company tax returns fit.
What self assessment support covers
Support can cover the trading figures, the personal return, or both.
- Registering with HMRCRegistering a new sole trader or partnership for self assessment by 5 October after the end of the first tax year, so a Unique Taxpayer Reference arrives in time.
- Working out trading profitPreparing the profit figure from your records, choosing between the cash basis and traditional accounting, and treating stock and unpaid invoices correctly.
- Vehicle and tool costsClaiming van and vehicle costs either by actual expenses or HMRC's approved mileage rates, and claiming capital allowances on tools, diagnostic equipment and vans.
- Partnership returnsPreparing the partnership tax return and splitting profits between the partners according to the agreement, with each partner's share on their personal return.
- Directors' returnsReporting salary, dividends, benefits in kind and other income for company directors, and checking the director's loan account position.
- Payments on accountExplaining the balancing payment and payments on account, and applying to reduce them if this year's profit is expected to fall.
- Filing and payment remindersFiling the online return before 31 January and telling you how much to pay and when.
What to plan for
Most self assessment problems come from leaving it until January.
Keep business and personal apart
Use a separate bank account for the business. It makes the profit figure easier to prove and the return cheaper to prepare.
Track mileage
If you use your own vehicle for work, keep a mileage log through the year. It is needed whichever method of claiming you choose.
Set aside tax
Put a share of every week's income aside. Your first bill can include a balancing payment and the first payment on account for the next year together.
Get ready for Making Tax Digital
Making Tax Digital for Income Tax began in April 2026 for higher-income sole traders and landlords, with the income threshold falling in the following years. Check when it applies to you.
Good to know
The key dates
Register by 5 October, file a paper return by 31 October or an online return by 31 January, and pay the balance by 31 January. Payments on account are due on 31 January and 31 July.
Transition profits
Traders who moved to the tax-year basis may have transition profit being taxed over several years. Make sure it is included on each return it applies to.
Class 2 National Insurance
Self-employed people no longer have to pay Class 2 contributions, but those with low profits may choose to pay voluntarily to protect their State Pension record.
Directors do not always need to file
Being a director no longer means a return automatically. Directors whose income is all taxed through payroll may not need one, but most taking dividends will.
How it works
- 1
Send an enquiry
Tell us whether you are a sole trader, partner or director, and whether you have a return due.
- 2
A quick call
A specialist asks about your income, your records and any letters you have had from HMRC.
- 3
The return is prepared
Your figures are worked out, checked with you, and the tax due is explained before the return is filed.
- 4
Ready for next year
You know what is due on 31 January and 31 July, and what records to keep for the next return.
Self assessment questions
When is the self assessment deadline?
Online returns must be filed by 31 January after the end of the tax year, and any tax owed paid by the same date. Paper returns are due by 31 October.
What are payments on account?
They are advance payments towards next year's tax, each normally half of the previous year's bill, due on 31 January and 31 July. You can apply to reduce them if your income is falling.
Can I claim my van as a business expense?
Yes, if it is used for the business. You can claim actual running costs plus capital allowances, or use HMRC's approved mileage rates, but not both for the same vehicle.
Should I use the cash basis?
The cash basis is now the default for sole traders and partnerships. Traders holding a lot of stock, such as car traders, may get a fairer result by opting out, so compare both.
Does a limited company director need to file a return?
Not always. A director with untaxed income such as dividends above the dividend allowance, or other untaxed income, generally needs to file.
Who prepares my tax return?
Your enquiry goes to a qualified accountant who works with motor trade businesses and prepares returns for traders and directors.
Get your tax return sorted
Send an enquiry with a few details about how you work, and a specialist will be in touch before the deadline catches up with you.