What is a Sole Trader?
A sole trader is a self-employed person who owns and runs their own business. There is no separate legal identity between the owner and the business, so you keep the profits after tax but remain personally responsible for its debts and obligations. A sole trader can work alone or employ members of staff.
GMS Accountants provides straightforward accounting and tax support for sole traders in Cambridge and Nottingham. We can help with annual accounts, Self Assessment tax returns, bookkeeping, VAT returns, payroll for employees and Making Tax Digital. Whether you are starting a new business or need ongoing support, please get in touch to discuss how we can help.
" I have used GMS Accountants for the last three years for my sole trader self-assessment tax return and their service has been efficient, friendly, and price competitive with attention to detail when giving business tax advice. Highly recommended service. "
Howard Trendell - HowTo Training
Tax Return
If your gross income from self-employment is more than £1,000 during a tax year, you will normally need to register as a sole trader and submit a Self Assessment tax return to HMRC. The UK tax year runs from 6 April to 5 April, and the deadline for submitting an online return and paying the tax due is normally 31 January following the end of the tax year.
As part of preparing your return, we will review your business income and expenditure and produce a profit and loss account. We will then calculate your taxable profit, ensuring that allowable business expenses and any available capital allowances are correctly considered. We will also explain your tax liability and whether Payments on Account may be required.
GMS Accountants can prepare and submit your Self Assessment tax return, advise you about allowable expenses and help you plan for upcoming tax payments. Please get in touch to discuss how we can support you.
VAT Returns
A sole trader must normally register for VAT if their VAT-taxable turnover exceeds £90,000 over any rolling 12-month period, or if they expect to exceed the threshold within the next 30 days. It is therefore important to monitor turnover regularly rather than waiting until the end of the tax year.
You can also register voluntarily when your turnover is below the threshold. This may be beneficial if your customers are VAT-registered or you have significant VATable business costs, although the additional administration should also be considered.
GMS Accountants can help with VAT registration, choosing an appropriate VAT scheme, maintaining digital records and preparing and submitting VAT returns. We can also explain what VAT you can reclaim and help resolve any queries with HMRC. Please get in touch to discuss your requirements, or read our guide to understanding VAT.
Payroll
As a sole trader, you are not an employee of your own business. However, if you employ members of staff, you may need to register as an employer and operate PAYE.
GMS Accountants can manage your payroll, including calculating wages and deductions, producing payslips, submitting information to HMRC and assisting with workplace pension requirements. This helps ensure your employees are paid correctly and your payroll deadlines are met. Please get in touch to discuss how we can support you.
