Accounting for Sole Traders
Accounting for Sole Traders
Operating as a sole trader means you are your business. You’ll have the freedom to be your own boss and the flexibility to determine how you work.
Being self-employed in this way can be a viable and highly successful option for many people, especially given the autonomy and adaptability this business structure offers.
Is this the right option for me?
If you’re thinking about a self-employed career, operating as a sole trader is one way to structure your business. While being a sole trader allows you to be fully in charge of your business decisions, it also means you are solely responsible for all aspects of the business.
This includes the crucial task of keeping your accounts in order. Before making the leap to self-employment, it’s important to carefully weigh your options and understand the responsibilities involved.
What can an accountant do for a Sole Trader?
An accountant can provide invaluable advice for setting up and operating as a sole trader, including the day-to-day management of your business.
At Cutts & Co, we have years of experience supporting self-employed workers and sole traders. We understand the unique challenges you face and know exactly how to help your business reach its full potential.
We manage all aspects of your accounting with a modern, adaptable approach that combines the power of online accounting with the expertise of a dedicated team. This ensures we can keep up with the pace and demands of self-employed work, allowing you to focus on what you do best.
- Guidance in setting up the right business structure
It’s important to choose the best business structure for the type of work you complete. Cutts & Co can help you determine whether a sole trader or Limited Company set-up is the correct choice, and help register either option with HMRC and companies house.
- Completing and minimising administrative workload
Not only will we take on the workload associated with maintaining records accurately and promptly, but our innovative online accounting approach will ensure you have fast access to records and reports, giving you the information you need when you need it.
- Saving you time, hassle and money
Partnering with Cutts & Co will not only hand you back your free time, but we can advise and help you save on costs. We can complete your yearly self-assessment, process VAT returns if they are needed and help identify where you could be saving on your tax.
- Injecting our cutting-edge approach to online accounting
With us, you can be working smarter by taking your accounting online. Our team know-all-things cloud, and with our Xero Gold Accreditation you can expect a fast, flexible accounting service that will keep pace with your business.
Our Accounting Services for Sole Traders
Our team is ready to help you, and can offer any sole trader the following services.
- Advising you on the best business structure
- Registering your sole trader status with HMRC
- Completing your self-assessment
- Managing and advising around NI payments
- Bookkeeping and reporting
- Registering VAT status if applicable
- Advising around contracts if necessary
- Expert cloud-based accounting
- Advice for seeking potential investment
What is a Sole Trader?
A sole trader is a common business structure for self-employed workers, where there is no legal distinction between you and your business. This means you are personally liable for any costs your business incurs and are solely responsible for the costs, management, and profits of your business.
To operate as a sole trader, you’ll need to register with HMRC, a process Cutts & Co can assist with. Being a sole trader offers you the freedom to run your business as you see fit, even if you have additional employees. However, it’s important to note that work may be harder to secure, and investment options might be limited.
Why start as a Sole Trader?
Sole trader status is an attractive option primarily due to the freedom and autonomy it offers. As a sole trader, you’ll be your own boss and free to make business decisions that align with your goals. For those considering self-employment, this structure can be the easiest and quickest way to get started.
The costs and administrative workload are lower than those associated with forming a limited company or partnership, making it an ideal choice for first-time entrepreneurs. Additionally, as the sole owner of the business, you’ll retain all profits after necessary taxes are paid.
Your responsibilities as a Sole Trader
As a sole trader, you are personally liable for all the costs associated with your business, including any litigation that may be taken against it. This means your personal assets and capital are at risk if the business encounters financial difficulties.
Unlike other business structures, all administrative responsibilities fall on your shoulders. This includes maintaining a comprehensive set of records, completing a yearly self-assessment for HMRC, and paying tax on your income. Additionally, if your business reaches a certain income threshold, you will also need to register for VAT.
