To set up as a sole trader, you need to take the following steps:
After you’ve registered as self-employed, you’ll need to fulfill the following responsibilities as a sole trader:
1. Abide by HMRC's record keeping requirements
You need to keep records of:
- Your sales and income
- Your business expenses
- Your personal income
- VAT records, if you've registered for VAT
- PAYE records, if you have employees
You need to keep your records for at least five years.
2. Submit a Self Assessment tax return each year
You''ll need to submit a Self Assessment tax return by 31 January each year.
An accountant like GoForma can help you with completing your Self Assessment tax return. You can learn more about the registration process, deadlines, late filing and payment penalties and Making Tax Digital for Income Tax on our Self Assessment guide.
3. Pay income tax and National Insurance Contributions
You'll need to pay income tax, as well as Class 2 and Class 4 National Insurance contributions.