Working as a sole trader
A sole trader is someone who runs a business that they are the sole owner of.
Setting up as a sole trader is simple all you need to do is register your status with the Inland Revenue and then you can start trading. Please note this includes registering for Self-Assessment.
Once registered as a sole trader, you can work alone or you can hire people to work for you, seek further advice in respect of this.
Working as a sole trader means you get to keep all of the proceeds of your business but it also gives you what is known as unlimited liability, meaning that any debts of the business will be entirely your responsibility.
Record keeping: you need to keep accurate financial business records in order to satisfy HMRC requirements. These will vary depending on your line of work, but as a sole trader you must keep records of all sales, purchases, expenses and earnings.
Please note: the more detailed your records are, the more likely they are to satisfy HMRC you are complying with the law.
Taxes for the self-employed: you will need to pay income tax and National Insurance on any profits you make.
If you have employees, you may also need to register for PAYE. You might wish to seek further advice in respect of this.
GDPR: The General Data Protection Regulations (GDPR) came into effect in May 2018. The regulations govern how businesses collect, store and handle an individual’s data, best advice is to seek further guidance on this subject. Useful guidance on the new regulations has been published by the Information Commissioners Office and can be found on their website at ico.org.uk. Insurance: You may need some sort of insurance if you are working on a self-employed basis. The type of insurance you need depends on your line of work. Here are a few common examples. Car or van insurance, public liability insurance, employers’ liability insurance, professional indemnity insurance, building and contents insurance, business interruption insurance, business assets and equipment cover, goods-in-transit insurance. For further explanation of each of the insurance listed seek professional advice.
Health and Safety: You will need to make sure your working premises are compliant with health and safety standards, particularly if you have employees working there