This is considered an out of date browser. This website has been developed with modern browsers in mind to allow it to display at its best in a wide variety of viewing situations - including mobile viewing. But we haven't supported older browsers like IE8. Please upgrade to the latest version of Internet Explorer - or try Mozilla Firefox or Google Chrome. Both are excellent browsers.
A Sole Trader means you are a one-man-band as self-employed. You don’t have a boss!
When earning as a Sole Trade, any profits you make are personally yours, but also if things were to go wrong then any liability is personally yours too.
You will need to register with HMRC as self-employed and complete Self-Assessment Tax Returns each year.
Once that is done you’ll need to keep records of your business income and any expenses so that you can accurately complete a tax return each year. This is considerably easy if you use cloud-based software such as Xero, Quickbooks, Kashflow or FreeAgent.
Your tax return will then determine how much income tax you must pay as well as the amount of National Insurance contributions you’ll owe.
As you grow and your turnover increases then you may need to be VAT registered. You must register for VAT if your turnover exceeds £85,000. You can choose to be voluntarily VAT registered before your turnover reaches the threshold which may be beneficial if you are selling to other VAT-registered businesses and wish to reclaim VAT.
For some sole trader businesses you may need a special permission or license from your local authority for example childminders and restaurants etc. So make sure to do your research when setting up!
Happy business planning and Sence wish you every success in your new venture!
If you want peace of mind and a professional service I would highly recommend Sence Accounting.
Bow Boutique Limited