Self Employed & Sole Trader Accounting

Premium accounting support at a fraction of the price.

Sole Trader (Self Employed) vs Limited Company

When you decide to become self-employed, one of the first decisions you’ll need to make is to decide on a business structure: operating as a sole trader, or through your own limited company.

There are a few traits that identify sole traders: you’re taxed as an individual (and don’t pay corporation tax), you have unlimited liability (your business isn’t considered a separate legal entity) and you have sole ownership over your business.

There are several reasons why the sole trader structure is the most popular option among businesses in the UK. It’s easy to set up—all you need to do is to register as self-employed with HMRC, choose a business name, and you’ll be all set to begin trading.

And if you change your mind sometime down the road—whether you decide to stop trading or to change to a limited company structure—the process of termination or transition remains fairly simple and straightforward. Unlike with limited companies, there’s no need to take additional steps such as applying to strike off your company.

You’ll also enjoy full control over your business, as there aren’t shareholders you’ll need to answer to. Sole traders also have fewer compliance requirements compared to limited company directors, which means that you’ll benefit from less paperwork, greater convenience and lower accounting fees.

Self Employed Registration Guide

Self Employed Registration Guide

Self Employed Registration Guide

  • What is a Sole Trader?
  • Sole trader advantages
  • Sole trader disadvantages
  • How to register self employed
  • Sole trader responsibilities
  • Self employed tax
  • Important self employed deadlines
Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
self employed tax guide

Self employed tax obligations guide

Self employed tax obligations guide

When you're self-employed, you have unique financial obligations-especially when it comes to paying your taxes.

When you work for a larger corporation, or even a relatively small business, your company takes on a large percentage of handling your tax responsibilities for you.

As a freelancer or small business owner, you're on your own. You work as an independent contractor for each of the clients you work for-and they don't take taxes out of your check before they send it to you.

How then should you handle the responsibility of paying your taxes?

This guide will help you get started:

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
how to register as self employed guide

How to register self employed with HMRC

How to register self employed with HMRC

From starting your side business to going freelance full-time, becoming self-employed can feel scary and exciting all at once.

Before you jump right in, you need to ensure that you're staying on the right side of the law- and this begins with registering as self-employed with HMRC.

In doing so, you can be sure that you're paying the right amount of income tax and National Insurance Contributions, and thereby avoid paying unnecessary financial penalties.

Ready to get started? We've got all the information you need below:

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
what is sole trader guide

What is a sole trader?

What is a sole trader?

If you're planning to start out on your own, one of the most important decisions you'll need to make is figuring out how you should structure your business.

As a freelancer, contractor or small business owner, there are three main types of legal structures you should consider:

  • Sole proprietorship
  • Limited company
  • Working through an umbrella company

It's a decision that requires careful consideration, and it's important that you seek advice from qualified professionals when you weigh out the pros and cons of each business structure. To begin with, you need to have a good grasp of the basics-and here's where our guide comes into the picture.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
7 Sole Trader Advantages

7 Advantages of Being a Sole Trader

7 Advantages of Being a Sole Trader

7 Advantages of Being a Sole Trader

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Switching from Self Employed to Limited Company

You started out as a sole trader—but as your business scales, there comes a point in time where it becomes more efficient to trade as a limited company.

There are a few reasons why sole traders decide to make the transition. 

Their profits may have grown to the point where it’s more tax efficient to trade as a limited company. They may decide it’s time to bring in shareholders or directors, or feel that their business could benefit from the increased credibility that a limited company structure brings.

Here’s what the process of transition involves: firstly, you need to decide if you’ll be the sole director. After which, you’ll need to notify HMRC of the change, select a business name, and register your limited company with Companies House.

Once the registration is complete, there are a few more items to cross off your checklist. You need to inform your stakeholders, set up a business bank account, set up your payroll, update your company details on your business documents and get your accounts sorted out.

Registering a Limited Company Guide

Registering a Limited Company Guide

Registering a Limited Company Guide

  • What is a Limited Company
  • 10 step process for setting up a Limited Company
Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Limited Company vs Sole Trader Calculator

Sole Trader vs Limited Company

Sole Trader vs Limited Company

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
register for limited company guide

Key considerations when you register a Limited Company

Key considerations when you register a Limited Company

As a freelancer, contractor, or small business, it is typical to start with the simple structure of operating as a Sole Trader.

While taxes and other administrative work may be relatively easy when you are a Sole Trader, as your volume of business goes up, there are more and more reasons to take on the task of becoming a Limited Company.

For instance:

  • A Limited Company protects your personal assets. If you are found liable in a lawsuit, only your business assets are at risk.
  • A Limited Company is usually more tax efficient than being a Sole Trader.
  • Once you have your name chosen as a Limited Company registered through Companies House, no one else can take your company name.

Luckily, running a Limited Company doesn't have to be exceedingly complex, though following a set plan will help to keep the complexity to a minimum.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
3 ways to register a limited company

3 Ways to Register Your Company for Free

3 Ways to Register Your Company for Free

Registering a company is a one off cost of £12 and done through Companies House. However, there are a few different ways that you can get this fee waved with other business services that you need.

We'll walk you through how to register your company for free and the perks that you'll get with each.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
set up a limited company guide

How to set up a Limited Company

How to set up a Limited Company

When you set up a limited company, you'll enjoy many advantages you don't get as a sole trader. Not only is it a tax-efficient way to run your business, it's also a great way to limit your personal liability and increase your credibility with customers. Additionally, it could open new avenues of work that wouldn't be open to you if you were operating as a sole trader, especially some contractor roles.

One of the disadvantages of running a limited company is that it involves a lot of paperwork, but with the help of this guide, we'll clear away the jargon and tell you exactly what you need.

If you're unsure about whether a limited company is right for you, check out our handy article comparing the differences between Limited companies and Sole Traders to see which business entity is right for you.

If you've got more important things to do than dealing with extra admin, you can always take advantage of one of our accountancy packages and we'll do all the forms and applications for you.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Limited Company Filing Deadlines

Being a limited company director comes with several legal responsibilities. In addition to your statutory duties, you’re also responsible for meeting your filing deadlines.

These include:

  • File your Self Assessment by 31st January following the end of the relevant tax year.
  • If you’re VAT-registered, you need to file your VAT returns 1 month and 7 days after your VAT quarter end date.
  • File your company accounts 9 months after your company year-end. If you’re in your first trading year, your first annual accounts are due 21 months after your date of incorporation
  • File your Confirmation Statement up to 14 days after the due date. The due date is 12 months after the date your company was incorporated, or 12 months after the date you filed your previous Confirmation Statement. 
  • File your company tax return 12 months after the end of the relevant tax year.
  • If you’ve just begun employing staff or using subcontractors for construction work, you need to register as an employer before an employee’s first payday. 
  • If you already have employees, there are a number of deadlines you need to meet for your payroll year end
  • Submit your final payroll report for the year before your employee’s final payday for the tax year ending 5th April. 
  • Provide your employees with the P60 by 31st May (following the end of the relevant tax year). 
  • File employee benefits and expenses using your payroll software, and submit your P11D and P11d(b) forms by 6th July.
  • In addition to the payroll year-end deadlines, you’re also required to:

Send the FPS on or before your employees’ payday. The FPS must be submitted each time you pay your employee. This means that if your employee is paid weekly, you’ll need to make 52 submissions across the year.

Can I change my company's accounting date / year end date?

Can I change my company's accounting date / year end date?

You can change your company's year-end-otherwise known as the accounting reference date (ARD). Changes can be made to your current financial year or the year before.

Your company's financial year can be shortened as many times as you want, with the minimum duration you can shorten it by being one day. You can lengthen your company's financial year by up to 18 months once every five years. If other conditions apply, such as if your company is in administration, you'll be able to lengthen your financial year more often.

Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

What are Company Deadlines?

What are Company Deadlines?

As a limited company director, there are several important deadlines you need to be aware of. These are:

  • File your Self Assessment tax return: 31st January 2022 for the 2020/2021 tax year
  • Pay you Self Assessment tax: 31st January
  • Registering for VAT: Register for VAT within 30 days of meeting the conditions for compulsory registration
  • Filing and paying VAT returns: 1 month and 7 days after your VAT quarter end date
  • Company accounts: First year accounts are due 21 months after incorporation. Subsequent accounts are due 9 months after the year end
  • Corporation tax registration: You need to register within 3 months of trading commencing.
  • File your corporation tax return: 12 months following the end of your accounting period
  • Corporation tax payment: 9 months and 1 day following the end of your accounting period
  • File your Confirmation Statement: You need to file a confirmation statement every 12 months, within 14 days after your confirmation date.
Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

What deadlines do I need to know as a contractor?

What deadlines do I need to know as a contractor?

As a contractor running your own limited company, you need to be aware of the following deadlines:

  • File end of year accounts to Companies House: 9 months after your company year ends. If it is your first year, the due date will be 21 months from the date your company was incorporated.
  • File your confirmation statement: This is due on the anniversary of incorporation each year
  • File your corporation tax return: This is due 12 months from your company year end.
  • Pay your corporation tax bill: Payment is due 9 months and 1 day after the end of the company year
  • PAYE RTI (Real Time Information) Returns: A submission of your company payroll has to be submitted in real time each month to HMRC. This is due on or before the intended salary payment. Any tax due from this can be payable on a quarterly or monthly basis as follows:
  • the 22nd of the next tax month if you pay monthly
  • the 22nd after the end of the quarter if you pay quarterly
  • VAT returns: Usually submitted on a quarterly basis, the company VAT is due to be filed and paid within 1 month and 7 days from the quarter end.
  • Self Assessment tax returns: Your Self Assessment Tax Return is always due to be filed by the following 31st January after the end of the tax year. This date is also the same deadline for payment of any tax due but you may also have a payment on account due by 31st July after this.
  • P11D: The submission of the company P11D will need to made by 6th July with any payment of National Insurance arising due by 19th July (22nd if paid electronically)
Read Full GuideRead Full GuideCalculate Now

Download Now:

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Schedule a free consultation

Speak to one of our accountants on a free 30 minute accounting consultation.

Self Employed Accounting Package

With our specialist accountants for sole traders, you'll never have to worry about staying on top of your finances. You'll get personalised advice from your dedicated accountant, access to a plethora of resources and stellar customer support. Don't take our word for it—see what our customers are saying about us on Trustpilot!

Start
£29
+ VAT per month
Unlimited accounting advice
FreeAgent accounting software
Self assessment filing
Unique partner offers
Try for free
No credit card required

See All Features

Self Employed Registration Guide

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Self Employed Registration Guide guide

Contractor & Freelancer Insurance Guide

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Contractor & Freelancer Insurance Guide guide

How do I pay myself when Self Employed?

Read more

How do I register as a Sole Trader?

Read more
7 Sole Trader Advantages

8 Advantages of Being a Sole Trader

We'll go through the key 7 advantages you need to know if you're thinking of becoming a sole trader.

Read more
What is a Sole Trader

What is a Sole Trader: Meaning & Definition

In our short guide, we highlight the key characteristics that define a sole trader.

Read more

Benefits of GoForma

Unlimited advice from personal accountant.
FreeAgent accounting software included.
Single contact for everything.
WhatsApp messaging support.
Tax optimized.
TRY FOR FREE