How are sole traders taxed?

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Hey there

I’d like to set up as a sole trader in London. ’m just trying to figure out how I pay taxes as a sole trader. Does anyone on here have an idea? Would appreciate the help very much, thanks.

Answers

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Sole traders pay Income Tax and National Insurance Contributions (Class 2 and Class 4) to HMRC through Self-Assessment. To do so, you will have to register yourself as self-employed. You can do this online.

At the end of every tax year, you must prepare and file your own Self-Assessment tax return and pay your Income Tax and Class 4 National Insurance directly to HMRC. Class 2 NIC are paid throughout the year. You may choose to do your own tax returns or you can appoint an accountant to take care of this for you.

a year ago
 

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