Telephone: 01895 623800
Email: admin@ashburns.co.uk

Sole Trader

What is a Sole Trader?

If you start working for yourself, you are classed as a Sole Trader. As a sole trader, you run your own business as an individual. However, you are able to employ staff if you require. You and the business are synonymous and known as a single entity, the Sole Trader, for both tax and administrative purposes. You have full control over your business and your finances at all times.

Once you are self-employed, you must register your self-employed status with HMRC within three months to avoid penalties being imposed for late notification. Thereafter, your business profits are subject to Income Tax and National Insurance rules. HMRC requires you to maintain accurate business records including your business sales and spending. Further, you must also comply with legal requirements that concern the protection of the customer. Finally, an end of year account should be filed with HMRC as p[art of your tax return every year ending on 5 April.

The sole trader route is the most popular way of starting up a business in the UK due to it being quick and less costly as compared to a limited company.

Why become a Sole Trader – The benefits

Control – You are the business and hence you have total control on it. You are able to make decisions without consulting other partners / directors / shareholder as you look to develop a business that works the way you want it to work
Flexibility – You being your own boss allows you to decide what type of work you undertake, timings of your work and most importantly the pricing of jobs
Accounting – Although you are required to keep your books up to date, the actual accounting is much simpler as compared to a limited company
Costs – There is absolutely zero cost setting up as a Sole Trader. All you need to do is inform HMRC that you are Self-Employed. Similarly, yearly accountancy fees are much lower compared to that of a limited company
Privacy – Your data is private to you and confidential
Profits – You are able to take home 100% of your profits

Sole Trader Cons

Tax – You are likely to take home less ‘net pay’ from an equivalent turnover comparing it to a limited company. The difference being the changes in tax rates
Liability – You are personally liable for any debts which you are unable to settle and this may can put your personal possessions including your house at risk
Status – Some clients may be inclined to deal with only limited companies
Losses – Any losses incurred are done so in your personal name

Why Ashburns

Are you currently working for yourself or looking to become Self-Employed. Ashburns is the right place to be. We have assisted over 10,000 Self-Employed individuals over the years from a broad range of industries and business sectors and have a highly experienced team to help you grow successfully.

Whether it is the end of the tax year, 5th April, or your accounting year end, a self assessment (SA) personal tax return has to be filed with HMRC. We aim to finalise Self-Assessment accounts within 6-8 weeks of receiving the paperwork. Our team of accountants will have your accounts prepared for your approval and then filed with HMRC. We will provide you with advice on maintaining good record keeping and provide guidance on the maintenance of proper controls over your businesses if required.

We believe it is essential that you, and we, should always know how your business is performing. Hence, our dedicated team works closely with you, every step of the way to help you work more efficiently and maximise the use of time and financial resources.

If you require a better understanding on being Self-Employed, you can arrange a free, no obligation consultation meeting. A fee quote for our services will be provided for you to take away and compare before you reach a decision.