Sole Trader

Sole Trader

Many businesses start with just one person, known as a ‘sole trader’. If you set up as a sole trader you’ll be self-employed, which means you’ll be your own boss.

As a sole trader you will:

You can employ staff. ‘Sole Trader’ means you’re responsible for the business, not that you have to work alone.

Naming your business

You can use your own name or trade under a business name.

You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.

Tax responsibilities

As a Sole Trader you must:

Below is a video explaining the tax implications of working on your own.

Registering your business

Tell HM Revenue and Customs (HMRC) you want to be a sole trader by registering as a new business. You’ll register for Self Assessment tax returns and Class 2 National Insurance at the same time.

You’ll then be able to report your self-employment income through a tax return after the end of each tax year.

Allow 10 working days to complete the registration process because HMRC needs to post you an activation code. You’ll be prompted for this when you first log in to your online account (also known as a Government Gateway account).

Below is video explaining the records you need to keep as a self-employed person. 

Useful links:

Growth Hub providers – help with being a sole trader.

Gov.uk- details of how to register as a sole trader.\

Gov.uk  - register for VAT

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