Tax Return Due Date 31st January 2018
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Starting a Business in UK- The Sole trader

Harish Verma

The sole trader

A sole trader consists of one person, who is in business on his own account. He is referred to as being self-employed.

Key features:

  • The business and its owner form one legal entity.
  • This is a very flexible way to trade, and there are more sole traders than any other business structure in the UK.
  • The sole trader is personally liable for all the debts of the business; if the business fails, he may go bankrupt.
  • All the profits of the business are taxed as if the personal income of the sole trader.
  • The sole trader may employ staff, but he is not an employee.
  • A sole trader cannot rent his own property to his business as he and the business are one and the same (he cannot charge himself rent).

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