Sole Trader accounting Services
A sole trader is a type of business where ultimate ownership of all the business assets and liabilities is concerned with single person, who enjoys all the rewards & profits, suffers all the risks and losses of the business operations. Sole proprietorship is not considered as a separate legal entity from its owner as in the case of private limited company, owner has the unlimited responsibility to pay all its debts even by selling its personal estate (if required). The sole trading business runs under direct control and power of a single natural person in contrast with partnership (which have at least has two owners)
Capital Investment and Profit distribution
The business drives capital only from the owner’s personal estate, it cannot invite potential investors as in partnerships and private limited companies, and thus the business has limited excess to capital investments. Although business could consider investment from small business funding organization like venture capitalists and individual business angels to get investments, by meeting certain conditions.
Withdrawal of money does not limited by statue or available net profits have (as in LLP and Pvt. Ltd companies), instead the owner can withdraw any amount of money available in the business without paying any additional tax.
A sole trade business does not pay its own tax on profits and gains (as in Pvt. Ltd. Company), instead the profits and gains are accessed as owners personal tax on a current year basis under income tax rules.
Losses can be adjusted against owner’s income from other sources of both current and previous year (e.g. salary, rental income, dividends) as well as chargeable gains of same years.
No tax is charged when profits are withdrawn from the business as all profits already assessed to tax on the individual as trading profits.
Administration in the sole trader ship:
Business is governed with the entrepreneurial style of organizational structure. All the rules and regulation are designed by a single person mentality, decision are often imposed rather than taking suggestion of affected individuals, managers are often appointed only to assist and support in business affairs while the accountants provide technical assistance.
Sole trades businesses also required to register for vat if the taxable supplies exceed the threshold limit of £83,000.
Self Employed Vs Sole Trader
A person will consider as sole trader if certain conditions are met. These are:
- If you run business for yourself and take the responsibilities for its success or failure
- If you have several customers at the same time
- It is your choice to decide how, where and when do you work.
- If you can hire other people at your own expense to work for you.
- If you provide the items of equipment to use in the work
- If you are responsible for finishing any unsatisfactory work in your own time
- If you charge your work an agreed fixed price
- If you sell goods or services in return for profit
Self employed person can be both an employee and an employer at the same time, for example if someone works for an employer at day time and does his/her own business in the evening.
If someone is trading then he/she also comes in the category of a self employed or a sole trader.
Pros & Cons of Trading as a Sole Trader
The entrepreneurs can maintain their aggressive style of work through power and control, because no one can interfere or challenge their decisions like in other structures (e.g. partnership or company). Assets of the business can be used personally by the owner without any tax implications.
The main disadvantage of sole trader ship is the risk involved in case of business failure, the creditors and payables have access to the personal estate of the owner, in case of bankruptcy.
Services for Sole Traders
- Your own dedicated industry specific accountant
- Accounting system implementation for the businesses.
- Manual book keeping services and Xero support services
- Year end accounts and bank reconciliation matters.
- Dealing with HMRC queries on your behalf.
- Registration for VAT and PAYE.
- Recommendation on tax efficient wages and dividends
- Completion and submission your self-assessment
- Unlimited help and advice via Skype, email, phone & live chat
- Assistance of Industry specific accountants.
- Reminders for all of your important deadlines
- Services you need in relation to registration as a sole proprietor.
- Matters related to trade mark registration of the business.
What we charge
We provide full set of accounts along with a range of additional valuable services in price which is favorable to you business.
We provide competitive fixed fee services starting from £20 for sole traders.
Just put your business details and receive a quotation tailored to your business.