If you want to run a simple small business with the fewest statutory filings, choosing a sole trader status could be the best option for you. Registration with HMRC can be done with a short phone call, and you don’t have to file accounts at Companies House. You will be required only to file a self-assessment return once a year. Any profits are treated as regular income for tax purposes.
There is a tradeoff to consider. Whilst you will avoid the significant administrative demands of running a company, you also assume complete liability in the event that your business fails. And you’ll generally pay more tax compared to a company, though this is offset by lower accounting fees.
Is operating as a sole trader the right choice for your business? Get in touch for advice about setting up correctly with the HMRC.
