A good definition of a sole trader is of a business owner whose business has no other owners and who is not legally separate from their business.
How we help
- Free Consultation
- Help to set up as a sole trader
- Act on your behalf with HMRC (64-8)
- Peace of mind for you – we take care of everything
- You get on with running your business
- Annual Accounts
A sole trader, or sole proprietor as it is sometimes known, has full control of their business and how it is run. As an individual, they own the assets of the company and are personally responsible for all of the debts as well. This is an important point as there is no protection from these liabilities and debts as there is in other business forms.
Sole traders are expected to register with HMRC, are required to fill in a self assessment tax return, and will have less onerous accounting regulations to stick to. Registration must be done as soon as possible otherwise a fine system is in place for underpaying or nor paying the correct amount of tax, even if the business is run on a part-time or casual basis.
Sole traders can employ workers and still remain under the legal banner as a sole trader.
It is usual that these firms are easier to set up than limited companies, and generally smaller amounts of capital are required to set up as a sole trader. Indeed, many of our startup clients commence their business on a part time basis to test the water, and grow it until it can support themselves and family. A few are still employed elsewhere as they run a small part time enterprise, which can suit all parties.
There is also National Insurance to pay as a sole trader, based on profits as well as a regular weekly payment. We can advise on the correct amounts as the business progresses.
BAS Associates can help with the business and personal affairs from startup, as well as in good and some possible lean times. Payroll and bookkeeping, business advice and a friendly team are here to help make tax and financial decisions. Call us on 01442 560050 or through our contact page.