There’s little doubt that being a sole trader is the most popular method of running a business in the UK. There are over 4,000,000 people who are sole traders, which accounts for at least 65% of all small businesses. Because the sole trader position is easy to set up and highly flexible, it’s proven to have enduring popularity. Most sole traders fall under the umbrella term of being self-employed, and the majority of freelancers do go for this business structure too.
There’s a lot of benefits to being a sole trader and there are resources to answer common questions like what is a sole trader?
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Complete Creative and Professional Control
The biggest benefit when it comes to being a sole trader that a lot of people love is that there is absolute creative control with regards to what you can do in the business. You are the sole owner and the main drive of the enterprise which means that whatever you want to happen you can make happen.
This creative and professional control is highly coveted by freelancers and self-employed individuals. Being able to pick what happens and when gives you a massive level of freedom, which is half of what makes being a sole trader such a desirable outcome.
Keeping All Profits
As a sole trader, you are entitled to keep any and all profit that comes from your business. There are no employees to pay, which means that whatever you make is yours to keep. That’s a beautiful notion for anyone who’s trying to make a certain amount each year.
Obviously, the usual rules about tax, self-assessment, and the like will still apply, but once you’ve paid your taxes, you’re free to do whatever you want with the profits.
Easy to Start
A big reason why becoming a sole trader is an attractive notion is because setting up is easy to do. All you have to do is to contact HMRC, and register as self-employed. Provided that you earned more than £1000 the year before, you can register.
It’s probably important to note that the value for registering as a sole trader might change over time and that you should look into registering as early as possible. You can register with HMRC by filling out a form online. Once you have registered, you’ll be subject to the usual rules and regulations, and will be obligated to pay tax.
Final Thoughts
As you can see, registering to be a sole trader has many benefits. These are just some of the rewards you can look forward to when you have this business structure. Remember to register properly and to follow the law when it comes to business operations. It would be highly inappropriate for anyone to conduct business as a sole trader without the proper registration. For more information, you can go to the HMRC website. They have
comprehensive guidelines and materials for anyone considering registering as a sole trader.
Danis Woods in Businessman, investment banker and stock exchange traders. On the same time he loves writing financial blogs to shed lights on different aspects that new and existing businessman are not aware of.
Jerry says
In the world of business and management accounts, there are three critical financial statements: profit and loss (or income) statement, cash flow statement, and balance sheet. Together these documents provide valuable numbers that will help you track your company’s performance over time and give a snapshot into how successful or not it is doing financially at any given moment in time.
Numbers can represent many things, but they always tell the story of what’s going on with your business. And these data point to some significant trends: You’re growing steadily and consistently meet all forecasts – even those that were too optimistic. These numbers show us something new; how we spend our money matters both in terms of costs versus revenue and which areas need improvement if anything else is changed about them financially or otherwise.