Setting up as a sole trader in the UK
The following information has been taken from the gov.uk website: Set up as a sole trader - GOV.UK (www.gov.uk). Please refer to this website for the full guidance.
Disclaimer: Please note that this article is not a substitute for legal advice. Sandberg is not responsible for the content provided in any of the links provided and does not endorse any external providers referenced below. Please always check official websites or seek professional advice in your country when you need guidance.
You need to set up as a sole trader if any of the following apply:
- You earned more than £1,000 from self-employment in the previous tax year;
- You need to prove you're self-employed, for example to claim Tax-Free Childcare;
- You want to make voluntary Class 2 National Insurance payments to help you qualify for benefits.
In the UK, if you’re a sole trader, you run your own business as an individual and are self-employed.
You can keep all your business’s profits after you’ve paid tax on them. You’re personally responsible for any losses your business makes. You must also follow certain rules on running and naming your business.
-
Keep business records and records of expenses;
-
Send a Self Assessment tax return every year;
-
Pay Income Tax on your profits and Class 2 and Class 4 National Insurance, and make sure that you budget for these.
A step-by-step guide on how to set up as a sole trader can be found here: Set up as self-employed (a 'sole trader'): step by step - GOV.UK (www.gov.uk)