So you have decided to register as a sole trader – maybe you are self-employed or you are just starting with your own company and you’ve decided to inform HMRC about it. No matter what was the cause for sole trader registration, you have some responsibilities that may seem completely new and complicated at first – as a sole trader you have obligations that are not standard in a typical tax evaluation. That’s why we’ve prepared a short list of sole trader’s responsibilities which you can find below.
As a sole trader you have to:
- Report your expenses and business sales and keep a detailed record of both to show during the evaluation – they are needed for proper tax returns and payments. That includes keeping all the bills you have that are connected with your business – always keep them after you pay them. When you have all your expenses and sales sorted out, you can safely send a Self Assessment tax form to HMRC at the end of a fiscal year.
- Register with proper authority for VAT – if your revenue is over a certain specified amount, you are eligible for VAT payer registration.
- If you are a sole trader working in a construction industry as a contractor or sub-contractor, you also have to register for CIS.
- Pay business debts, if you have them of course.
- And, last but not least, you are covered by the income tax and by national insurance.
- All of these should be filed to HMRC and other required authorities as the need appears.
You should ask your accountant for help if you are not sure how to fulfill all of the above requirements!