Self-employed Sole Traders
Expert Accountancy Solution for Sole-Traders. We Show You How to Do It.
In the UK, if you are self-employed and running your own business independently then you are a self-employed sole trader. To run your business legally, you will first have to register your business with HM Revenue & Customs. HMRC allows sole traders to keep their profits after they have paid their tax on their income. However, if there is a loss in business then it is the responsibility of the individual to bear the loss, this can be offset against other income or future profits.Reasons to register as a Sole Trader
- Your income is £1,000 or above within the tax year April to April
- Proof of income as self-employed, as an example to apply for finance or tax credits and other applications
- You can make voluntary payments for Class 2 National Insurance to be eligible for state benefits such as Pension.
You will have to register for Self-Assessment and file a tax return every tax year.What You Will Have to Do
- Maintain records of your business’s sales and expenses
- Submit Self-Assessment tax return every tax year
- You will have to pay income tax on the profits you earn from your business
- You will also have to contribute for Class 2 and Class 4 National Insurance
Sole traders can do business under their name or can have a different name for their business, you will not require to register your name.Business Names
A sole trader should not include:
- ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’
- be offensive
- be the same as an existing trademark
Names should not show your association with government and local authorities. But if you have the permission for the same you can.
Do check what are the words for which you need to have permission and who are the authorizing bodies for the same.How can we help?
If you are a sole trader or planning to register yourself as a sole trader with HMRC we are here to assist you in the process of registration and completion of your tax return.