Benefits Of A Sole Trader
When it is done correctly, becoming a Sole Trader can carry many benefits. Self-employment is increasing in popularity in the UK, and the start-up process is very simple. All you need to do is inform HMRC and register as self-employed.
Roger Hatherall & Co has years of experience with helping Sole Traders, and we work closely with you to ensure you receive the best advice available. Starting your business is not always easy. It requires a lot of hard work and dedication, and we can offer start-up services to help you keep your finances in check.
For expert, professional Sole Trader accounts management, call Roger Hatherall & Co on 01225 429610.
As a sole trader, you are in full control of your business. You have the sole freedom to decide on its operations and its growth, with no other directors, shareholders or partners.
Apart from being compliant with VAT and deducting and paying to HMRC if you have employees, you only need to complete and file an annual Self Assessment Tax Return, something that your accountant can help you with.
While Sole Traders pay the same amount of tax as traditional employees, you will only be taxed on your profits rather than your overall income. Since you are working for yourself, you can claim on items used for business purposes, such as your equipment or office rent.
As long as the necessary paperwork is at hand to prove that your assets are business-related, you can claim, rather than adding these expenses to your taxable profits. It is advised that professional advice is taken from a registered accountant to help you with the understanding of cash flow and tax variables.
Low Accounting Cost
You still need to keep records of expenses and invoices for tax returns, but the overall cost of hiring an accountant is significantly lower than those who are part of a limited company. Limited companies have more legal responsibly than someone operating as a Sole Trader. As a Sole Trader, there is less work to undertake, and you only need to complete a profit and loss account.
However, keeping note of your cash flow and balance sheet is worth preparing regularly in order to manage your business efficiently.
Easier To Close Down
If you decide that you no longer benefit from being a Sole Trader, it is relatively simple to close down. To do so, you need to settle any liabilities, collect money that is due and sort out your assets. Lastly, you need to inform HMRC.
However, if your business does not have sufficient funds to pay off any debts, you may want to seek help from Citizens Advice.