Tax Returns
Sole Traders

As a self-employed sole trader you will need to complete a self assessment tax return when it comes to paying your tax. This can be quite a complex process and can be quite a steep learning curve. 

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Tax Returns
Sole Traders

Although using an accountant isn’t a requirement, it is often a very good idea. As a sole trader it is unlikely that your area of expertise is in finance, and therefore it can be very difficult to grasp the various complexities of the tax system and to make sure that you don’t overpay or underpay tax.

Tax Returns for Sole Traders Help

All taxable income must be reported on a self assessment tax return however non-taxable income and ISA interest is not reportable. You also have a personal allowance to take into account. You will need to include your salary and your trade profits as well as your rental income and bank interest and dividends. It can also be all too easy to miss the deadline and to face a penalty from HMRC. 

It is the sole trader’s responsibility to tell HMRC that they are in business and need to file a self assessment tax return. Business owners must:

  1. Keep all company records of expenses and sales
  2. Send an annual self assessment tax return
  3. Register for payroll for employee payments
  4. Pay income tax on all profits
  5. Pay class 2 and, if applicable Class 4 NI contributions
  6. Register for VAT if the turnover reaches the specified threshold
  7. Register with the CIS if you are a sub contractor or contractor in the construction industry

As skilled and experienced accountants The Accountancy Solution can ensure that your tax returns for sole traders is accurate and submitted in a timely manner for your peace of mind.


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Are you just looking for an answer to a general question? We always provide free advice to individuals and self employed persons. You can send us an email, call us or fill in the form. But you should be asking answers to general questions.

Self Assessment Tax

Individual Tax Return

There are certain conditions where you would need to file self assessment tax return to HMRC. Discuss with our tax accountants your bsuiness

Landlord Tax Return

As a landlord, you must file your tax returnand do not miss out on the tax relief of certain expenses. Call our office for a quick chat.

Partnership Tax Return

Partnerships are obliged to file independent tax returns and this becomes base for partners taxable profits. Call us to discuss and free quote.

Domicile and Resident

If you are non resident or work outside UK, you must understand Resident and Domiciled definations. It can save you time and money.

Frequently Asked Questions

Most frequent questions and answers

As a general rule, you should regsiter for tax return when you are earning more than £1,000 per annum as sole trader. You can also register if you want to make voluntary Class 2 National Insurance payments.

It would take only 10-15 minuites to populate a spread sheet each day to enter data of your daily expenses. You can also take picture of reciepts and save it in a secured drive. Or you can use a software like Reciept bank.

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Maintaining your NIC contributions Covid-19

If a person already has 35 qualifying years or is likely to do so by the time that they reach state pension age, missing a year will not adversely affect their state pension entitlement. However, if they have less than 35 years (and will be able to reach the minimum 10 years needed for a reduced state pension by the time that they reach state pension age) making voluntary contributions can be worthwhile.


Selling the Buy to Let property at a loss

While any gain on the sale of a property that has been the taxpayer’s main residence throughout the period of ownership is covered by private residence relief, the flip side is that if the main residence is sold at a loss, the loss is not an allowable loss for capital gains tax purposes.