Accounting for Sole Traders
Being a sole trader is one of the simplest ways to get started in business but there are still many processes that need to be followed to ensure that you are compliant with HM Revenue & Customs’ (HMRC) requirements.
Accountancy for Sole Traders
As a sole trader you will find time very limited. Our accountancy service for sole traders will help you make the most of your venture with experienced accountancy advice. Our range of advice includes:
Significant advantages of being a sole trader:
Year End Accounts
National Insurance requirements
- Tax planning
Total control – You have total control over the business. Decisions can be made quickly and easily, from accountancy and financial decisions to general business decisions.
Easy to change to another trading identity – It is relatively easy to change your trading identity from that of a sole trader to a limited company, and we can guide you through this process.
Keep the profit – As the owner of the business, all of the profit belongs to you (after you have paid the tax liability to HMRC).
Business affairs are private – When you run an unincorporated business your accounts are not made available to the public therefore competitors cannot see what you are earning hence they will know less about how your business works and how it succeeds.
Significant disadvantages of being a sole trader:
You are personally liable and accountable for all of your business debts – Should your business fail you could end up losing your personal assets such as your home, car, etc.
Can be difficult to raise finance – When you run a small unincorporated business, banks will not lend you large sums and you may find raising finance for the business is very difficult unless you are prepared to change your ownership status.
Can be difficult to enjoy economies of scale – Smaller businesses often find that they cannot buy supplies in bulk and do not enjoy the same discount as larger businesses.
Reasons why Sole Traders are often successful:
They can offer a more personal approach – A smaller business can have closer contact with their customers and develop a close rapport in order to give a high level of service and customer care.
They can be sensitive to the needs of their customers – Since you are closer to the customer that allows you to react more quickly to their needs than a larger business.
Can cater for the needs of local people – Small local businesses will be closer to the community and can develop good business relationships with their understanding of the area and local knowledge.