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Sole traders

If you run your own business as an individual you are considered to be a sole trader.

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What is a sole trader?

If you run your own business as an individual, hire people, provide the equipment you need, charge for your services and sell for profit, you are considered to be a sole trader. Which is not a limited company.

As a Sole Trader you keep all of your business’s profits, after tax. You are personally responsible for any losses your business makes. Your legal identity and that of your business are one and the same. You must also follow certain rules on running and naming your business.

Sole Traders are expected to pay tax on any earnings above their tax-free Personal Allowance, thus registration with HMRC online is required within 3 months of becoming a Sole Trader and you must complete an annual self-assessment tax return. You may also be required to register for VAT.

HMRC sole trader requirements

To see more about HMRC sole trader requirements click the button below

Learn more

According to the HMRC, you are likely to be self-employed if you:

Run your business for yourself and take responsibility for its success or failure
Can hire other people at your own expense to help you or to do the work for you
Are responsible for finishing any unsatisfactory work in your
own time
Have several customers at the same time
Provide the main items of equipment to do your work
Can decide how, where and when you do your work
Charge an agreed fixed price for your work
Sell goods or services to make a profit
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When you need to set up as a Sole Trader?

You need to set up as a Sole Trader if any of the following apply:

  • If you earned more than £1,000 from self-employment

  • You need to prove that you are self-employed (i.e. for instance, if you want to claim Tax-Free Childcare)

  • You want to make voluntary Class 2 National Insurance payments to help you qualify for benefits

Registration process

There is a simple three-step process to start out as a Sole Trader in the UK, this includes:

01

Letting HMRC know that you are self-employed within 3 months

02

Register for Self Assessment as a Sole Trader

03

Pick a business name

Packages and features

What is included?

Free Initial Consultation

Preparation & filing of Tax Return

Automated Filing Reminders

Tax Planning

Free Email & phone support

Quarterly Business Health Meetings

What is included?

Free Initial Consultation

Full set of accounts (Annual Financial Statements)

Preparation & filing of Tax Return

Payroll - Up to 3 employees

Automated Filing Reminders

Quarterly Bookkeeping

Tax Planning

Free Email & phone support

Quarterly Management Accounts

Accounting System Setup/Review

Quarterly Business Health Meetings

What is included?

Free Initial Consultation

Full set of accounts (Annual Financial Statements)

Preparation & filing of Tax Return

Payroll - Up to 10 employees

Automated Filing Reminders

Monthly Bookkeeping

Tax Planning

Free Email & phone support

Monthly Management Accounts

Accounting System Setup/Review

Apps integration

Part-time Finance Director -1 hour/month

Quarterly Business Health Meetings

Packages and features

Check out our packages and features for Sole Traders. To get an instant quote for the packages click the button below:

What’s included?

Base

Peak

Summit

Free Initital Consultation

Full set of accounts (Annual Financial Statements)

Preparation & filing of Tax Return

Payroll

Up to 3 employees

Up to 10 employees

Automated Filing Reminders

Monthly Bookkeeping

Quarterly Bookkeeping

Tax Planning

Free Email & phone support

Quarterly Management Accounts

Monthly Management Accounts

Accounting System Setup/Review

Apps integration

Part-time Finance Director -1 hour/month

Quarterly Business Health Meetings

see more

About our pricing

Personalised accounts

Your dedicated accountant will produce personalized management accounts on a monthly or quarterly basis. The management accounts provide an overview of your expected tax obligations at year-end.

Fixed fees

Monthly fixed retainer based solutions. Xero Online and Dext subscription fees (where applicable) are covered in the fixed monthly fees.

Tax efficiency reviews

Your dedicated bookkeeper will conduct regular tax efficiency reviews, ensuring you’re claiming everything you could be and operating in the most efficient way possible.

FAQs

Can you be self-employed and employed at the same time?

Yes, for example if you work for an employer during the day and run your own business in the evenings, this is considered to be both self-employed and employed.

Do I need to register as a Sole-Trader with the HMRC?

Yes, Sole-Traders are expected to pay tax on any earnings above their tax-free Personal Allowance, which requires registering with the HMRC.

Can Xenith Wealth help me register with the HMRC?

Yes, Xenith can assist with the registration and submission to the HMRC.

Do I have to pay tax and national insurance as a sole trader?

Yes, you as a sole-trader are required to pay income tax on all profits exceeding your Personal Allowance of £12,570 per year.

When do I need to register with the HMRC?

You are required to register with the HMRC within 3 months of setting up/ starting your self-employment.