Accountant for Virtual Assistants: The First Year, Date by Date

If you are a UK virtual assistant working for your own clients, you are a sole trader, and the tax rules that apply to you are the ordinary ones. That is worth saying plainly, because a lot of virtual assistants (VAs) offer bookkeeping as a service and the two questions get tangled together. Keeping a client's records is what you sell. Your own registration, your own return and your own deadlines sit entirely separately, and nothing about your service list changes them. What follows is the first year in date order, from the first paid piece of work to the first tax payment.

Milestone one: your first £1,000 of fees

The trading allowance covers the first £1,000 of gross trading income in a tax year. Gross means before you deduct anything, added across every client, every agency and every platform. Four clients paying you £300 each takes you past it in a month.

Below £1,000 there is usually nothing to register and nothing to file. Above it, you register for Self Assessment and then choose, each year, between claiming the £1,000 allowance or claiming your actual expenses. It is one or the other, never both. A VA with a laptop, a couple of software subscriptions and a home desk usually has real costs above £1,000 by the end of a full year, which makes actual expenses the better claim, but in a part-year first stint the allowance can win.

Milestone two: 5 October after your first tax year ends

The tax year runs to 5 April. If you passed £1,000 during the 2026/27 tax year, your deadline to tell HMRC you are self-employed is 5 October 2027. Registering triggers your Unique Taxpayer Reference, which arrives by post and which you cannot file without, so leaving it until the deadline itself is a bad idea when the return is due less than four months later.

You can register at any point after you start trading. Doing it early costs nothing and removes the risk of the reference arriving in January.

Milestone three: 31 January after your first tax year

For a 2026/27 first year, the online return and the payment are both due on 31 January 2028. That date brings a second obligation with it.

The first is the balancing payment: the tax and Class 4 National Insurance on the profit you made in 2026/27. The second is a payment on account toward 2027/28, which applies where your liability was over £1,000 and less than 80% of it was collected at source. Each payment on account is 50% of the previous year's income tax and Class 4 combined, one due 31 January and the other 31 July. So the first January bill is commonly 150% of the year's tax, and the surprise is what catches new VAs out rather than the rate itself.

Milestone four: the rolling £90,000 VAT test

You must register for VAT once taxable turnover passes £90,000 in any rolling 12 months, or when you expect to pass it in the next 30 days on its own. Rolling matters: it is any 12 consecutive months, checked at the end of each month, not your tax year. The deregistration threshold is £88,000.

Most solo VAs never approach £90,000. The ones who do are usually running a small team or subcontracting to other VAs, at which point the fees flowing through you are your turnover even if most of the money goes straight back out.

Milestone five: your Making Tax Digital entry date

Making Tax Digital for Income Tax replaces the single annual return with digital records and quarterly updates. It phases in by qualifying income: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028.

Qualifying income is gross self-employment and property income, before expenses. That is the trap for this trade. A VA billing £26,000 and taking home a good deal less is measured on the £26,000, so the April 2028 entry point catches a large share of part-time and second-income VAs who assume the regime is for bigger businesses. Our page on the April 2026 MTD deadline sets out the mechanics.

Charging clients outside the UK

VA work travels well, and overseas clients turn up early. The relevant rule only bites once you are VAT registered, and until then the question is simply which of your income counts toward the threshold.

Once registered, the general rule for services supplied to a business customer belonging outside the UK is that the place of supply is where the customer belongs. The supply is then outside the scope of UK VAT and you charge none, while still recording it and, in most cases, still recovering input VAT on your costs. Supplies to overseas customers who are not in business, and several specific categories of service, follow different rules.

Whether outside-the-scope income counts toward the £90,000 registration test is the part people get wrong in both directions, and it is fact-specific enough to be worth a short conversation rather than a rule of thumb. If a meaningful share of your fees comes from abroad, get your own position checked before you register or decide you are safely under. Our VAT registration page covers the UK-side test in full.

What a VA can actually claim

The costs that recur in this trade are small and numerous, which is exactly the profile that gets under-claimed:

• Laptop, monitor, headset, chair and desk, claimed as capital allowances rather than as running costs
• Software and app subscriptions used for client work
• The business share of your mobile and broadband
• Working from home, at either the flat rate or the actual proportion
• Professional indemnity insurance
• Training that maintains or updates skills you already use in the business
• Website, domain, and platform or marketplace commission
• Bank charges on a business account, and accountancy fees

For home working, HMRC's flat rate is £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for 101 hours or more, still current when this page was checked in August 2026. That tops out at £312 a year. If you work full time from a room used mainly for the business, the actual-cost method (a floor-area or room-count share of rent or mortgage interest, council tax, gas, electricity, water and insurance) usually gives more, at the cost of keeping the workings.

Worked example: Ivo's first full year

Ivo is a virtual assistant in Ipswich. He began trading in 2026/27. He invoices £34,000 across six clients, four UK and two overseas, and his allowable costs and capital allowances come to £3,400:

Cost	Amount
Laptop and monitor (capital allowances, claimed in full)	£900
Software subscriptions	£480
Working from home at the flat rate, 101+ hours a month	£312
Professional indemnity insurance	£280
Business share of phone and broadband	£228
Accountancy fees	£360
Training	£240
Website and domain	£120
Marketing and sundries	£480
Total	£3,400

Taxable profit is £34,000 minus £3,400, which is £30,600.

The personal allowance is £12,570 and the basic rate band runs to £50,270 at 20%, and Class 4 National Insurance is 6% between those two figures. Those figures were still current when this page was checked in August 2026.

• Taxable after the personal allowance: £30,600 minus £12,570 = £18,030
• Income tax at 20%: £18,030 x 0.20 = £3,606
• Class 4 NIC at 6% on the same £18,030 = £1,081.80
• Total for 2026/27: £3,606 + £1,081.80 = £4,687.80

Because that is over £1,000 and none of it was collected at source, payments on account apply at 50% each, which is £2,343.90 a time. Ivo's January 2028 payment is therefore £4,687.80 + £2,343.90 = £7,031.70, with a further £2,343.90 due on 31 July 2028.

Those figures also settle two questions Ivo has not asked yet. At £34,000 of turnover Ivo is nowhere near the £90,000 VAT threshold. But £34,000 of qualifying income puts him over £20,000, so his 2026/27 figures are what bring him into Making Tax Digital for Income Tax from 6 April 2028. Getting his records into MTD-compatible software during his first year costs him nothing extra and saves the scramble later.

Sole trader or limited company

At Ivo's profit level, incorporating would add statutory accounts, a corporation tax return, a payroll scheme if he pays himself a salary and a second set of deadlines, in exchange for very little. The arithmetic starts to shift once profits push into the higher-rate band and you do not need to draw everything out, and it shifts again if a client insists on contracting with a company rather than an individual. Our sole trader versus limited company comparison runs the numbers at different profit levels.

One point if you do incorporate: where you work through your own company for a single end client on terms that look like employment, the off-payroll working rules may apply and the status decision usually sits with the client, which our IR35 page explains.

Getting the first year filed

Nothing here needs a specialist. A VA's tax position is ordinary sole-trader tax, and the useful test of an accountant is whether they will get the registration in early, set the home-working and capital allowance claims up properly, and warn you about the payment on account before January rather than after. Our Self Assessment page covers what a return involves, and the allowable expenses checklist goes through the deductions line by line.