Sole Traders Accounts
Being a self employed sole trader is the simplest way to get started in business. As a sole trader, you can quickly adapt to changes in your business and you maintain complete control over your business. You will need to notify HMRC that you have started in business and will have to prepare sole trader accounts and include the profit contained in those Sole Trader Accounts in your personal tax return. Everybody who is self employed is legally obliged to complete a personal tax return.
As a Sole Trader you are responsible for settling all liabilities therefore there is less paperwork required and it is less complicated. Other advantages of being a sole trader are as follows;
- As a sole trader, you don’t need to notify Companies House or deal with any of the administrative responsibilities required of limited companies.
- As a sole trader it is easier to set up supplier accounts, obtain a loan because a Limited Company will have less assets to back up business debt, while a sole trader has both the business assets and the owner’s personal assets
- It is an easier concept for individuals to grasp when they start their business.
- Can be sensitive to the needs of customers – since you are closer to the customer and will react more quickly.
- Business affairs are private – competitors cannot see what you are earning, so will know less about how the business works and how it succeeds
The disadvantages of being a sole trader are
- Raising capital for a Sole Trader from unrelated investor (and not a bank) can be more difficult, having said this with Sole Trader Accounts prepared by a Tax Accountant .
- As a business grows the risks of financial difficulties increase and the Sole Trader has unlimited liability for business and personal assets.
We at KRA will notify HMRC that you have started in business and will prepare your accounts and include your profit in your self assessment tax return. Everybody who is self employed is legally obliged to complete a self assessment tax return. We at KRA will deal with HMRC for you and leave you to run your business and ensure you don’t get bogged down with paperwork.