What is a sole trader? 

If you’re self-employed, you’re legally known as a sole trader. Let’s build a picture. 🖼️

You’re responsible for owning and managing your business. You may be a trader, freelancer, or independent contractor.  But, what does being a sole trader mean for you? And, how can you manage your taxes?

What’s the advantage of becoming a sole trader? 

Being your own boss, of course! Run your business the way you want. No more consulting directors, or crushing your vision. 

It doesn’t end there… Sole traders also benefit from: 

What is a sole trader business structure?

The sole trader business structure has become popular, probably due to its simplicity. You pay income tax on your profits rather than corporation tax. 

Here’s how the UK Income tax rates and bands work 👇

Depending on your profits, you may also have to pay National Insurance (NI) contributions.

Sole trader Do’s and Don’ts 

• Do register as a sole trader after you’ve earned your first £1,000 from self-employment✅
• Don’t file a tax return if you earn less than £1,000 in a tax year ❌
• Do pay your tax bill by the 31st of October (paper) or 31st of January (online) ✅
• Don’t register every year, unless you didn’t send a tax return last year ❌
• Do let HMRC know if you’re no longer a sole trader. They’ll expect a tax return otherwise ✅

How to register as a sole trader 

If you’ve recently become a sole trader, you’ll need to register with HMRC to pay tax. Check out our guide here, and follow the steps to register online. You can also register using the SA1 form: you can download it on HMRC’s website, fill it in, and send it by post. 📮

Don’t forget to register by 5th October 🍂

How can sole traders manage their taxes?

Here’s the thing. Being your own boss means you’re responsible for your bookkeeping. If you’re a sole trader, you’ll need to keep track of a few things, like your 👇

• Income 
• Invoices 
• Expenses

Sounds tiresome, right? Well, hold back the tears, because we’re going to help you boss your bookkeeping. 💪

Free bookkeeping for sole traders 

Managing your finances and taxes, all in one place. Sounds like a good starting point, right? 

Well, what if we told you sole traders we had a bookkeeping tool or two up our sleeve to make that happen?😉 And, our  bookkeeping tools are free! 

Invoicing for sole traders 

If we’re being totally honest, invoicing is a pain in the 🍑. Until now. 

With our free (cough cough) bookkeeping tools, sole traders can now create, personalise, send and track invoices faster and all in one place! 

Sole trader expenses 

Expensing your business-related costs is one of the many perks of being a sole trader.  

And, as our free bookkeeping tools were designed with sole traders in mind, we’ve got your expensing needs covered. 🦸 Say goodbye to manual data entry, and hello to our AI-powered data extraction tool.

All your business spending is pulled straight from your receipts, and stored online, ready for tax filing. 📷

Sole traders take in your 360 view 

We’re not talking about some boujee 360 restaurant, just the whole picture of the money coming in and out of your piggy bank. With everything all in one place, you can see an overview of your income and expenses when you go to file your tax return. And, all with as little admin as possible! 

Link your sole trading bank account 

Sole traders feed your soul with this. Securely connect your bank account or credit cards to automate your finance management, and add all your business transactions to the platform in just a few clicks.

That’s what we call soul food! 

Like the sound of easy bookkeeping? Check out our video below for more info 👇

Ready. Set. Go! 

Now you’re registered, you’re ready to boss your business. 🏁

And, don’t forget our free bookkeeping tools are always there to help you along the way!