Going Solo: Sole Trader Basics
Starting Out as a Sole Trader: Setup, Tax, and What to Expect
Starting your sole trader journey is exciting - but it comes with responsibilities. From legal requirements to financial obligations, SBX Accountants is here to guide you every step of the way.
Choose the Right Business Structure
Different structures - sole trader, partnership, limited company - have different tax, liability, and admin implications.
➡️ Explore more in our guide:
What Type of Legal Structure Should I Choose?
Sole Trader vs Self‑Employed – Know the Difference
“Self‑employed” simply means you run your own business — but it doesn’t indicate a legal structure.
As a
sole trader, you’re the sole owner, entitled to all profits but also personally liable for any debts.
✅ You’ll need to register with HMRC as a sole trader to file your Self‑Assessment.
How to Register as a Sole Trader
Registration is easy and entirely online. Just sign in to your Government Gateway account and complete HMRC’s registration process.
Your Responsibilities as a Sole Trader
As a sole trader, you’ll need to manage:
- Accurate bookkeeping
- Annual Self‑Assessment tax returns
- Income Tax and National Insurance contributions
- VAT returns (if your turnover exceeds £90,000)
Understanding Tax Obligations
Your tax is based on profit. Maintaining proper records helps you forecast and avoid unexpected bills.
📌 At SBX, we handle forecasting, tax submissions, and Making Tax Digital (MTD) compliance for you.
Why Bookkeeping Matters
What Records Should You Keep?
Keep the following for at least 5 years after each tax year deadline:
- Sales invoices and income records
- Business expense receipts
- PAYE data (if you employ staff)
- VAT records (if registered)
When to Register for VAT
You must register if your taxable turnover exceeds £90,000 in a 12-month period.
📌 Voluntary registration may also be beneficial — SBX can advise you.
What Business Expenses Can You Claim?
You can deduct many legitimate expenses, including:
- Office equipment and stationery
- Travel, fuel, and vehicle expenses
- Marketing and software subscriptions
- Mobile phone and internet bills
- Professional fees (e.g. accounting)
📎 Always keep receipts to support your claims.
✅ Need Help Getting Started?
SBX Accountants provide:
- Fast sole trader registration
- Simple, MTD-compliant bookkeeping
- VAT advice and filing
- Help claiming all allowable expenses
📞 Request a free callback today and get personalised support to launch with confidence.
