Sole Traders

Sole trader, often also referred to as self-employed, describes a business that is owned and controlled by one person.

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The business may have several employees & consultants. Individuals providing a personal service quite often set up as a sole trader. For example, solicitors, accountants, plumbers, electricians, builders, hairdressers, civil engineers, gardeners, photographers etc. Sole traders, owner of the business, are personally liable for the debts of their business and may be required to settle the debts of their business out of their own personal resources. A Sole trader may have an unlimited liability. There are ways of mitigating a sole trader’s liability. We strongly advise that you seek expert professional assistance in this matter before setting up as a sole trader.

Advantages of being a sole trader, to name a few:

* It is easy and quick to set up.
* Suits most small business ventures.
* You are your own boss and in control of your time.
* It is a great way to try out “that business idea you have secretly nurtured”.
* Fit the business around your time availability.
* Could have a small initial start-up cost and capital requirement.
* Some of these sole trader businesses may be started and run from home, hence low running costs.

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Sole traders have the general overall control due to the hands-on approach to running of the business. A Sole Trader can make decisions promptly without the sluggish nature of hierarchy of a larger business structure.

A few of the disadvantages of being a sole trader:

  • The risk of unlimited liability to settle business debt. A sole trader has no one to share the business responsibility of running of the business. The very nature of working as self employed, by your-self, can get a bit lonely for some.
  • It is difficult to take holidays or time off whilst ill, as there will be a loss of income.

A sole trader has to be resourceful with several skill-sets if they are to survive competition. Single owner business tax advice and National Insurance Contributions (NIC) considerations:

Self-employeds are liable to income tax on profits. A self-employed is required to keep records of business income and business expenses. A self-assessment registration is required of an individuals trading as sole traders, filing of a personal tax return on an annual basis on strict HMRC deadlines, otherwise penalties apply. Personal tax on a sole trader business is normally payable in two instalments, with certain exceptions

A sole trader may be liable to a Class 2 National Insurance Contributions (NIC). Class 4 National Insurance Liability (NIC) is chargeable on profits above a certain level of a sole trader business profits.

Our Sole Trader Tax and Accountancy expertise can be provided as an individual service or you combine it with our other tax advice and accountancy services that Brighton Accountant offer as your appointed Accountants and Tax Advisers.

For well over 20+ years we have served as Sole Trader Accountants and Personal Tax AdvisersWe cover London to Brighton, Chichester, Eastbourne, Hastings, Hove, Lewes, Worthing and most of East Sussex and West Sussex. We service most of Greater London and Central London.

 

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Call Brighton Accountant for an immediate appointment for the authoritative Sole Trader Tax advice and expert Accountancy help or any tax consultancy and accountancy related matter.

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