What are the benefits of being a sole trader?

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Evening

My name is Dominic, and I’m a journalist. I would like to expand my business, and feel like it’s time to set up a company. Everybody goes on and on to me about the benefits of becoming a limited company, but what I would like to know is whether there are any big benefits from setting up as a sole trader, instead?

Thank you

Answers

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Hi Dominic,

There are a number of benefits to setting up as a sole trader. The set-up process if really quick and easy because you simply have to register online with HMRC as self-employed. This takes a few minutes and it does not cost anything.

Sole traders also have very few filing and reporting requirements. Once registered, you are required to work out your own tax at the end of each tax year. You can do this yourself by completing a Self-Assessment tax return online. Alternatively, you can pay an accountant to do this for you.

Your Income Tax and Class 9 National Insurance should also be paid at the end of every tax year. Class 2 National Insurance, however, should be paid on a regular basis at least twice per year.

Your personal and business details will not be made available to the public, but you must tell HMRC if any of your registered details change. You can easily report these changes online.

For more information on setting up and running a sole trader business, please click here.

a year ago
 

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