Sole Trader / Sole Proprietor / Self Employed
Setting up your business as a sole trader means you can run your own business as an individual and as a result, you are self-employed. Sole trader is the easiest and simplest way to start a business. When sole trader business grows, there is an opportunity for sole trader to transform their self-employed business into limited company.
Tax Responsibilities of Sole Traders
Whether you are part time or full time sole trader, you must register for self-employment with HM Revenue & Customs (HMRC) as soon as you start your business. Once you register for self-employment, you will then need to submit your self-employed personal tax returns after the tax year end (5 April).
Self-assessment personal tax returns is a system used by HMRC to collect your taxes. You will need to pay income tax on any business profits after deducting business expenditures from your business income.
You’ll also have to make weekly flat rate Class 2 National Insurance contributions (NICs), and if the annual profits exceed a certain level, you will then have to pay Class 4 NICs. You are also responsible for keeping detailed financial records for your business, as well as proof of any expenses (receipts, invoices, etc.).
Furthermore, if you employ other people in your self-employed business, you must collect income tax and NICs on behalf of them and then pay to HMRC.
How we can help?
Setting up business as sole trader is very easy however, as your business grows, any form of accounting and statutory work can become time consuming and may shift your focus from your business growth.
MJ Support & Co is firm of dedicated tax advisors, accountants and business consultants who are supporting sole traders in looking after their accounting and tax matters and making sure their businesses are fully compliant with HMRC.
Whilst freeing up your valuable time, we strive to provide our clients with flexibility and freedom to grow business without worrying about the accounting needs and tax responsibilities as well as taking full advantage of all potential financial benefits.
Self Employed Registration https://online.hmrc.gov.uk/shortforms/form/CWF1ST
Self Assessment https://www.gov.uk/personal-tax/self-assessment
Self Assessment Support https://www.gov.uk/government/news/webinars-emails-and-videos-if-youre-self-employed
Class 2 and Class 4 National Insurance https://www.gov.uk/self-employed-national-insurance-rates
Keeping Records https://www.gov.uk/self-employed-records