What is the definition of a Sole Trader?
Being a sole trader is an excellent starting point for anyone looking to establish their own business. It is simply the phrase used to describe conducting a business as a best accounting sole trader or with a group of people, but without the benefit of a legal structure to protect the firm, as opposed to operating as a limited liability corporation or as a partnership.
Setup is a breeze.
Starting up as a solo trader is a straightforward three-step process:
- Inform HMRC that you are a self-employed individual.
- You must register for Self Assessment if you are a lone proprietor.
- Choose a name for your company.
After that, you're practically free to begin trading immediately, and there's no requirement to register with the Companies House as a result.
less administrative tasks
Although keeping precise records of sales and costs is necessary as a single trader, doing business in this manner is more simpler due to the fact that you are only need to submit a Self Assessment tax return each year (and perhaps a VAT return).
Costs are reduced.
You will not be required to retain the services of a solicitor or a company formation agency.. If you decide to hire an accountant, you may find that their fees are less expensive because there are less statutory filing and reporting deadlines to contend with.
Additionally, you will not be required to pay a registration charge to Companies House, which will result in a significant savings of approximately £13.
More privacy is desired.
Because you are a single trader, you are protected from disclosure under HMRC's taxpayer confidentiality regulations. Because your information is protected, your competitors have less knowledge about you, making it more difficult for them to assess your capabilities and compete with your company.
Complete command and control
Probably the most significant advantage of being a lone trader is the ability to direct your own destiny – there are no shareholders to consult, and the only opinions you must take into consideration are your own and, if you have one, the opinions of your accountants. That also implies that you have complete control over your post-tax gains and can spend them anyway you see fit.
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