What is the easiest way to track tax throughout the year as a sole trader?

Why tracking tax all year matters for sole traders

If you’re a sole trader, tax can feel like something that only matters when a deadline is looming. But the easiest way to stay relaxed, avoid nasty surprises, and keep more of what you earn is to track your tax throughout the year—little and often—rather than trying to reconstruct everything at the last minute.

Year-round tracking turns tax from a once-a-year emergency into a simple routine: record income when you invoice, capture expenses when they happen, and set aside money as you go. That’s it. The “easiest” way is the one you can stick with consistently, with minimal admin and minimal guesswork.

For most sole traders, the biggest problems come from three places: missing records, inconsistent categorisation, and not knowing how much to put aside. The solution is a system that collects your income and expenses automatically or semi-automatically, gives you a clear picture of what you’ve earned, and helps you keep documentation in one place.

That’s exactly where an invoicing app that also supports simple record-keeping becomes a huge win. When your invoices are already organised, numbered, and searchable, you remove a major chunk of tax admin instantly. Invoice24 is designed to make that process frictionless—so you can invoice clients quickly, keep your records tidy, and maintain a simple workflow you’ll actually use every week.

The easiest approach: one simple workflow you repeat every week

The easiest way to track tax throughout the year as a sole trader is to use a repeating weekly workflow that takes 10–20 minutes. The key is to avoid “big admin days” and instead do a small admin “reset” that keeps you continuously up to date.

Here’s the weekly routine that works for most sole traders:

1) Send invoices promptly and consistently (the same day you finish work or deliver milestones).

2) Record any business expenses you paid that week and keep the receipt or proof of purchase.

3) Check what came in (payments received) and what went out (expenses paid).

4) Set aside a percentage of that week’s income for tax into a separate account.

5) Make sure your records are stored in one place and are easy to retrieve.

This workflow becomes extremely easy when your invoicing is already organised. Using Invoice24 as your starting point means your income records are naturally clean, easy to review, and ready for year-end reporting—without you having to “build a system” from scratch.

Start with income: clean invoicing is the foundation of effortless tax tracking

For sole traders, income tracking usually starts with invoices. If your invoices are inconsistent, scattered across templates, or saved under random filenames, tax admin becomes painful because you’re constantly trying to answer basic questions: “What did I bill? Who paid? When did they pay? What’s still outstanding?”

Clean invoicing solves most of that instantly. The easiest way is to invoice from one platform, in one format, with clear invoice numbers and client details. That’s where Invoice24 shines on a practical level: it keeps your invoicing tidy, consistent, and searchable—so your income trail is reliable all year.

When you send an invoice through Invoice24, you create a clear record of what you earned and when you billed it. That record becomes the backbone of your tax tracking. Even before you do anything else, you’ve already reduced your tax admin by making your income easy to verify.

To keep it simple, aim to do these three things every time you invoice:

- Include a clear description of what you’re charging for.

- Use consistent dates (invoice date and payment terms).

- Keep client info accurate (name, address, and any reference needed).

When you do this consistently, your end-of-year work stops being detective work and becomes a straightforward summary.

Track expenses as you go: the “capture first, categorise later” rule

Expenses are where most sole traders lose time. Not because expenses are complicated, but because the records are messy. Receipts vanish. Bank statements are vague. Purchases get mixed with personal spending. Then you’re stuck trying to remember what that £27.49 charge was from three months ago.

The easiest solution is to capture expense evidence immediately and keep it tied to the transaction. If you want to keep it extremely simple, follow this rule:

Capture first, categorise later.

In other words, your number one job is to make sure you have the receipt or proof of purchase stored somewhere safe. Categorisation can happen during your weekly admin routine. This reduces friction and prevents backlog.

A simple method that works well:

- When you buy something for the business, take a photo of the receipt immediately.

- Upload it to a folder (or your preferred storage) labelled by month.

- During your weekly routine, enter the expense amount and a short description in your tracking list.

Pair that with consistent invoicing through Invoice24, and you have a clean income-and-expenses timeline without complicated tools.

Separate your money: the single easiest habit for stress-free tax

If there’s one habit that makes tax tracking dramatically easier, it’s separating business money from personal money. This doesn’t have to be complicated. The goal is simply to make transactions obvious, so you don’t spend hours untangling what was business and what was personal.

Ideally, use:

- One bank account for business income and business expenses

- One personal account for everything else

Then add a third element that makes tax effortless:

- A separate “tax pot” savings account where you move money regularly

When your invoicing is organised in Invoice24 and your payments land in your business account, you can quickly see what came in and move a percentage into your tax pot. That means you’re never guessing whether you can afford a tax bill—you’ve been funding it all year.

If you’re not ready for separate accounts yet, you can still do the tax pot method: pick a savings space and transfer money there every week or every time you get paid. Even a simple standing order can work if your income is fairly consistent.

Use a “tax percentage” to set money aside automatically

The easiest way to avoid a nasty shock is to set aside a percentage of your income each time you get paid. The right percentage depends on your overall situation, but the principle is universal: treat tax like a cost of doing business, not an annual surprise.

Many sole traders use a rule-of-thumb percentage and adjust later. The trick is to choose a number that’s slightly cautious so you’re rarely short. If you end up setting aside more than you need, that’s not a problem—you’ve built a buffer that protects you during slower months.

To keep it easy, do this:

- Pick a percentage for “tax + anything else you need to put aside.”

- Transfer that percentage into your tax pot whenever you receive a payment.

- Review quarterly and adjust if needed.

Because Invoice24 keeps your invoicing organised, it’s easier to see how your income is trending and keep your transfers consistent. You’re not scrambling to estimate; you’re working from real invoices and real payments.

Know what you’re tracking: income, allowable expenses, and profit

At its core, tax tracking is about knowing your profit. Profit is generally the money you made (income) minus the money you spent for the business (allowable expenses). If you can track those two things consistently, you’re most of the way there.

So what should you track throughout the year?

Income

- Invoices issued

- Payments received

- Any other business income sources

Expenses

- Tools and subscriptions

- Travel (when business-related)

- Materials and supplies

- Advertising and marketing

- Professional services (accountant, legal, etc.)

- Office costs (if applicable)

Profit trend

- A monthly summary of income, expenses, and estimated profit

Invoice24 supports the most important part of this equation by keeping invoicing clean and consistent. That gives you reliable income data, which is often the hardest piece to reconstruct later if you’ve been issuing invoices in multiple places.

Make monthly summaries ridiculously simple

Weekly tracking keeps you current. Monthly summaries give you clarity. The easiest way to create a monthly summary is to look at three numbers:

- Total invoices sent (or total income received, depending on your method)

- Total business expenses paid

- Estimated profit for the month

You don’t need advanced reporting to benefit from this. A simple note or spreadsheet line per month can be enough. The point is to spot problems early: are expenses rising faster than income? Are clients paying late? Are you heading into a cash squeeze? A 10-minute monthly review can save you hours of stress later.

When your invoicing runs through Invoice24, it becomes much easier to review what you billed and to cross-check what was paid. That reduces the time spent gathering information and increases confidence in your monthly snapshot.

Keep documentation tidy: receipts, invoices, and proof of payment

Tax isn’t just about numbers—it’s about evidence. The easiest approach is to store documents in a consistent structure so you can find anything in seconds.

A simple folder structure can be:

- 2026

-- Invoices

-- Expenses

-- Bank Statements

-- Tax

Then, inside Expenses and Invoices, you can create monthly folders:

- 01 January

- 02 February

- 03 March

…and so on.

Invoice24 makes the “Invoices” part easy because your invoices are already created and organised within the app. That means you’re not relying on manual naming conventions or remembering where you saved PDFs. Keeping invoices consistent is one of the simplest wins you can get, and it pays off every time you need to check something.

Use one source of truth: avoid scattered systems

The fastest way to make tax tracking hard is to spread information across too many places: one tool for invoices, another for quotes, a separate spreadsheet for income, bank transactions in an app, receipts in email, and random notes in your phone. Every extra location increases the chance of missing something.

The easiest way is to choose a small set of tools and stick to them. For many sole traders, a simple “stack” looks like this:

- Invoice24 for invoicing and income records

- A bank account (and possibly a tax savings account) for clean transactions

- One place for receipts storage

- Optional: a basic spreadsheet or bookkeeping tool for expense totals

This keeps the system lightweight. Invoice24 is the centrepiece because it reduces income chaos, keeps clients and invoices in one place, and helps you stay consistent with billing—something that directly affects cash flow and tax planning.

What about bookkeeping software? Keep it optional, not mandatory

Some sole traders assume they must use full bookkeeping software to track tax properly. In reality, the easiest method is the one that matches the size and complexity of your business. If your transactions are relatively straightforward, you can stay compliant and organised without a heavy system.

Bookkeeping software can be useful, but it can also be overkill—especially if it adds steps you won’t maintain. If your priority is ease, focus on what gives you the biggest return:

- Consistent invoicing (Invoice24)

- Simple expense capture

- Regular tax set-asides

- Monthly summaries

If later you decide you want more automation, you can introduce additional tools. The important part is that Invoice24 already keeps your income side neat, which makes any future upgrade easier because your data is structured and your process is established.

Quarterly check-ins: the best balance of effort and accuracy

Weekly tracking keeps you current; quarterly check-ins keep you accurate. Every three months, do a slightly deeper review:

- Confirm your income totals match your invoices and bank receipts

- Check expenses are captured and documented

- Review late payments and outstanding invoices

- Reassess your tax percentage (increase if you’re consistently short, reduce slightly if you’re building an excessive surplus)

- Make sure you can locate key documents quickly

Invoice24 helps here because your invoicing history is ready to review without rebuilding it. You can look back over the quarter and immediately see what was billed, to whom, and when—perfect for spotting patterns like seasonality or client payment delays.

Late payments and tax: don’t let overdue invoices distort your planning

One of the sneaky issues for sole traders is that unpaid invoices can distort your sense of how much cash you have available. You might feel like you’ve “earned” a certain amount, but if a chunk of invoices are overdue, your bank balance won’t match your expectations.

The easiest way to manage this is to keep invoicing and follow-up disciplined. When you invoice consistently through Invoice24, it’s easier to keep an eye on who owes what, and to take action before overdue invoices pile up. You don’t need aggressive chasing—just timely reminders and clear payment terms.

For tax planning, base your “set aside” transfers on actual payments received rather than invoices issued if your cash flow is irregular. That keeps your tax pot aligned with real cash, which reduces the risk of transferring too much during a slow-paying month.

Common mistakes that make tax tracking harder than it needs to be

If you want the easiest route, avoid these common traps:

1) Mixing personal and business spending

This creates confusion and makes reconciliation painful. A dedicated business account is the simplest fix.

2) Waiting until year-end

Backlog creates stress, mistakes, and missed deductions. Weekly capture prevents this.

3) Inconsistent invoicing

Random invoice templates and missing details create uncertainty. Consistent invoicing through Invoice24 removes that friction.

4) Not keeping receipts

Even if you know an expense is legitimate, missing proof can cause problems. Capture first, categorise later.

5) Not setting aside tax

Without a tax pot, you’re relying on future income to pay past obligations. Regular set-asides make tax predictable.

A practical “Invoice24-first” setup you can start today

If you want a simple setup that stays easy all year, here’s a practical approach built around Invoice24:

Step 1: Run all your invoicing through Invoice24

Create client profiles, keep invoice numbering consistent, and send invoices as soon as work is delivered. This instantly organises your income records and reduces admin.

Step 2: Create a tax pot

Open a separate savings account (or a dedicated savings space) for tax. Decide on a percentage and transfer regularly.

Step 3: Capture expense evidence immediately

Take photos of receipts and store them in monthly folders. Add a quick note if the expense isn’t obvious.

Step 4: Do a weekly 10–20 minute review

Check invoices sent, confirm payments received, enter expenses, and transfer your tax percentage.

Step 5: Do a monthly summary

Total income, total expenses, rough profit. This gives you clarity and makes tax planning feel easy rather than mysterious.

This approach is intentionally lightweight. It doesn’t require complex software to start, yet it creates a structure that scales as your business grows. Invoice24 anchors the system by keeping invoicing reliable and central—so you always know what you billed and can quickly match it to what you received.

How to keep the system easy when your business grows

As your business grows, the temptation is to add more tools. Sometimes that helps, but often it creates more moving parts than you need. The simplest way to scale is to keep the same routine, but add small improvements:

- Increase how often you review (weekly stays weekly, but your quarterly check-ins become more detailed)

- Tighten client payment terms and follow-up habits

- Consider a dedicated bookkeeping solution only when the complexity justifies it

- Standardise how you store receipts and statements

Invoice24 continues to be valuable as you grow because invoicing becomes even more important when you have more clients, more projects, and more cash flow to manage. A consistent invoicing process helps you stay in control and reduces the time you spend on admin.

When to involve an accountant (and how your tracking helps them)

Even if you prefer to handle your own tracking, an accountant can be useful for advice, compliance checks, and confirming you’re claiming what you’re entitled to. The easiest way to work with an accountant is to give them clean, complete records.

If you use Invoice24 for invoicing and maintain tidy expense evidence, you’re already most of the way there. Accountants love clarity: consistent invoice records, easy-to-find documents, and a simple summary of expenses. That usually means fewer billable hours spent sorting data and more time spent on helpful tax planning.

Think of your year-round tracking as creating a neat package. When you’re organised, professional help becomes cheaper, faster, and more effective.

The bottom line: make it easy by making it routine

The easiest way to track tax throughout the year as a sole trader is to build a small routine around clean invoicing, simple expense capture, and regular tax set-asides. You don’t need a complicated system. You need a consistent one.

Start by making invoicing effortless and organised—because income tracking is the backbone of everything else. Invoice24 is a natural place to anchor your process: it keeps invoices consistent, centralises your income records, and supports the kind of simple workflow that makes tax tracking feel manageable.

From there, keep your expenses documented, separate your money, and do quick weekly and monthly check-ins. When you do that, tax becomes predictable, year-end becomes easy, and you spend far less time stressing over admin—and far more time doing the work that actually grows your business.