Accounts for Sole Traders

Keep it simple

Being a sole trader is the simplest way to run a small business.

The benefits

Setting up is relatively easy, you can make quick decisions without having to consult others, your financial information is kept private and you get to keep all the profits after tax.

As a sole trader, HM Revenue and Customs require that you submit an annual self assessment tax return, keep records showing your business income and expenses for at least six years and ensure your accounting records are kept in the appropriate format, as failure to do so can result in unnecessary penalties.

Accounts packages for sole traders

We offer a choice of two fully compliant sole trader packages, each designed to suit your individual business requirements.

Sole Trader Start Up Kit

Sole Trader All Essentials Accounts Package

Sole Trader Information

Starting up

Being a sole trader is the simplest way to run a business. It does not involve paying any registration fees, keeping records and accounts is straightforward, and you get to keep all the profits. However, you are personally liable for any debts that your business runs up, which make this a risky option for businesses that need a lot of investment.

Set-up

• Registering as self employed. We can help you get your business off to a flying start with our Sole Trader Start-Up Kit which contains everything you need to get you on the road to successful self employment.

Records and accounts

• You have an obligation to submit an annual self assessment tax return to HM Revenue & Customs.
• You must also keep records showing your business income and expenses for at least six years.
• You must also ensure records are kept in the correct format as legislation brought in by HM Revenue and Customs stipulates that failure to keep the documents in the appropriate format can result in unnecessary penalties.

Profits

• Any profits go to you.

Tax and national insurance

• As you are self-employed, your profits are taxed as income.
• You will pay monthly fixed-rate Class 2 and annual Class 4 National Insurance contributions on your profits.

Liability

• As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble

Management and raising finance

• You make all the decisions on how to manage your business.
• You raise money for the business out of your own assets and/or with loans from banks or other lenders.

Features of a sole trader

• Sole traders are for one person / individual
• Easy to get up and running
• Owner is personally liable for debts
• Business owner may choose their own business name
• Separate accounting records need to be established for the business
• The business is not a separate legal entity [as it is with a Limited Company]
• Profits are taxed at the individual's marginal tax rate

Please contact us for further information.