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?
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:
Here’s how the UK Income tax rates and bands work 👇
|Band||Taxable Income||Tax rate|
|Personal Allowance||Up to £12,570||0%|
|Basic rate||£12,571 to £50,270||20%|
|Higher rate||£50,271 to £125,140||40%|
|Additional rate||over £125,140||45%|
Depending on your profits, you may also have to pay National Insurance (NI) contributions.
When you’re self-employed, you have to pay your income tax and national insurance contributions yourself in your annual Self Assessment. Our calculator helps you quickly assess how much you owe.
However you may be eligible for a tax refund when:
In your case when you earn £50,000:
You pay no income tax on first £12,570 that you make
You pay £7,286 at basic income tax rate (20%) on the next £36,430
No contributions on the first £9,568 that you make
You pay £3,549 in contributions (at 9%) on the next £39,432 that you make
You pay £159 in NI Class 2 contributions
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 🍂
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 👇
Sounds tiresome, right? Well, hold back the tears, because we’re going to help you boss your bookkeeping. 💪
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!
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!
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. 📷
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!
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 👇
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!
Manage your self-employed finances in one place with 10/10 bookkeeping tools.