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Benefits of Operating as a Sole Trader

A Beginner’s Guide

As leading Peterborough accountants, we see the benefits of operating as a sole trader every day. Here’s what it could mean for you and your business. 

What is a sole trader?

First of all, what is a sole trader? Sole traders are self-employed people who own and run their businesses without there being any legal distinction between themselves and the business. To put it simply, when you operate as a sole trader you ‘are’ the business. This influences a lot of factors in running said business, from your legal responsibilities to the way you pay taxes. Here at Linda Carr Accountants, we work with a large number of sole traders in and around Peterborough.

It’s easy to get started

One of the biggest benefits of operating as a sole trader is how easy it is to register as one. You’ll have to register as a sole trader for Self-Assessment purposes so that you can let HMRC know that you are self-employed. Once you have done that, you are pretty much good to go! You don’t have to register with Companies House, which you would have to do if you were operating as a limited company. You don’t even have to have a separate business bank account – although we recommend doing so, so that you can have a clear view of all business transactions. 

Less admin

When you operate as a sole trader, you’ll have much less admin to deal with. You will need to complete and submit Self-Assessment tax returns so that HMRC can figure out how much tax you owe. Aside from that, there’s little else to do! However, it is a great idea to have robust bookkeeping practices in place. This will make submitting accurate tax returns much easier and will give you the financial insight you need to make important business decisions. 

You can hire staff

A common misconception is that operating as a sole trader means that you are in it alone. The name is a little misleading – as you can hire staff. You’ll need to follow the correct procedure when doing so, and you will need to consider things like registering as an employer and getting set up on PAYE, payroll, employer’s National Insurance, and employee benefits such as holiday, maternity, and sick pay. As an employer, you also need to offer a workplace pension. 

We’re here to help

Although operating as a sole trader can be incredibly straightforward in many aspects, it does pay to have an experienced accountant in your corner. We have worked with many sole traders and can provide advice and insight that you wouldn’t be able to find elsewhere. We offer Self-Assessment, payroll, bookkeeping and a wide range of other accountancy benefits – so you can have support and assistance that is tailored to the exact needs of your business. 

Find out more today

If you are a sole trader and want to find out more about how we could help you, then please get in touch with our team today. We’re here to answer any questions that you may have and will be able to give you all the information you need to move forward with confidence.