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We know that setting up as a sole trader can be confusing, that’s why we’re answering all of your questions.
No need to thank us just yet! 😜
Simple! You’ll need to set up as a sole trader if:
In short, yes:
They’re the same thing.
Yes! You can work for an employer as well as yourself. Let’s look at a quick example:
Nadia works for Starbucks full-time as well as running her small business. Nadia is employed and self-employed.
Her Starbucks income is taxed through PAYE before it arrives in her bank account. But she’ll have to file a tax return for her self-employed income.
PS: You’ll also have to work out how much tax you owe on your self-employed income by yourself.
See more details about being both employed and self-employed here.
You can register after you’ve earned your first £1,000 from self-employment. The ‘hard deadline’ is 5th October of your second tax year.
You’ll have to pay your tax bill by 31st January (if you opt to file a paper tax return, the deadline is 31st October.)
If you earn less than £1,000 in the tax year, you don’t need to do a tax return.
Yep, but only 28 days before you start your work (this is the limit).
If you have to send a tax return but did not send one last year, you need to re-register for Self Assessment and pay Class 2 National Insurance.
If, on the other hand, you’re looking to stop being a sole trader, you need to let HMRC know – otherwise, they’ll still expect a tax return. Find out more about how to stop being self-employed here.
You can trade under your own name, or you can choose another name. The choice is yours!
You’ll need to register for VAT only if you meet any of the follow criteria:
Find out how to register for VAT here.
Need a hand filing your tax return? Let us help! 🙋
Our accredited accountants can sort your Self Assessment in as little as 48 hours, find out more here.
Manage your self-employed finances in one place with 10/10 bookkeeping tools. And all for free – forever and always.