Скачать или смотреть Legal Obligations Of A Sole Trader In The UK - Explained In 60 Seconds

Working for yourself comes with lots of benefits. However, there are also certain things you must do. Here’s our guide to your legal obligations as a sole trader, explained in under 60 seconds...

📌 Full guide to the legal obligations of a sole trader: https://www.business4beginners.co.uk/...

#shorts #soletrader #UKbusiness #selfemployed #entrepreneur

Register As Self-Employed
—------------------------------------------------
Registering as self-employed with HMRC is easy and quick.

Once you have registered, you will receive a Unique Tax Payer Reference (UTR). You will need this to file your tax form at the end of the financial year.

Keep in mind that you still need to register for Self-Assessment if you choose to work only part-time as a sole trader, while also keeping your day-job.

National Insurance
—------------------------------------------------

You’ll need to register for National Insurance.

Class 4 National Insurance is automatically calculated once a year as a percentage of your profits. It will be automatically included in your taxes when you complete your self-assessment tax form.

Unlike Class 4, Class 2 National Insurance is a flat-rate contribution, calculated on a weekly basis. Even though the amount is relatively small, it’s important to register for Class 2, or you’ll be asked to pay for it all in a lump-sum in the future.

Also, you need to register for Class 2 National Insurance to qualify for state benefits. You can normally pay your Class 2 National Insurance through your Self-Assessment (although there are some exceptions).

Self-Assessment tax return
—------------------------------------------------

Your final legal obligation is to file with HMRC a self-assessment tax return. This form is used by HMRC to collect income tax on your profits.

As a sole trader, you need to fill in the tax return form at the end of the financial year (April 5th). Your income tax is calculated based on the profits you have filed. You need to pay the bill by January 31st of the next year.

Filling your tax return means you need to submit records of your sales and expenses as well as receipts and other pertinent records, so good bookkeeping is essential.

Other Possible Requirements
—------------------------------------------------

VAT

As a sole trader, it is not necessarily compulsory to register for VAT. Registering for VAT is optional up to a turnover of 85,000 pounds. Past this threshold, however, you have to register for VAT.

If you do, you will need to complete VAT return forms and update your bookkeeping records as well.

PAYE

If you choose to have employees in your payroll, you are legally required to register for PAYE (Pay As You Earn system). The PAYE means you will be collecting Income tax and National Insurance contributions from your employees, which you will then be paying to HMRC. You can register online for a PAYE reference number. You will also be required to set up an employer’s workplace pension scheme.

Additional Licences

You may also need various additional licences, depending on your line of business. For example, you may need one for the software packages you use in your business computer(s), the music you play in your shop, the e-mail list of clients to whom you will be sending promotional material (GDPR rules) or the photos you include in the websites you create for your customers.


Resources
-------------------

Advantages Of Being A Sole Trader Vs Limited Company: https://www.business4beginners.co.uk/...
Best Accounting Software For Sole Traders: https://www.business4beginners.co.uk/...
Do I Need Business Insurance As A Sole Trader?: https://www.business4beginners.co.uk/...
Changing From A Sole Trader To A Limited Company: https://www.business4beginners.co.uk/...


DISCLAIMER: The information contained in this video is for general information purposes only. Any reliance you place on such information is therefore strictly at your own risk. Always consult with a qualified accountant to get professional advice tailored to your individual situation.