SO, WHAT ARE THE BENEFITS OF A SOLE TRADER?
The thought of going into self-employment can feel intimidating. There is much to consider when setting up a business and a key aspect of this is business structure as this can have a massive impact on the level of tax you will need to pay with different structures working for and against you depending on the type of business and level of earnings. This article will focus on the benefits of a Sole Trader structure. This article covers benefits which include:
- Be Your Own Boss
- Ownership of Profits
- Setting Up Is Simple
- Less Admin Involved
- You Can Easily Change Your Business Structure Later On
- How Can Onyx Help?
Be Your Own Boss
The main benefit associated with being a sole trader is that you are your own boss giving you complete control over the business. You don’t have to worry about other directors or shareholders, take account of their views or compromise your own vision for the business giving you complete freedom. Because of this freedom you are able to make snap decisions regarding the direction of the business should any issues or market volatility arise, with this being said the success or failure of the business lies directly on your shoulders.
Ownership of Profits
Not having the burden of shareholders means all the after-tax profits you make are yours. Giving you complete control on other opportunities such as reinvesting profits elsewhere.
Setting Up is Simple
Essentially, you only need to let HMRC know you are now self-employed by registering for self-assessment as a sole trader and choose your business name. Aside from any licences you need to obtain which are specific to your business or industry, you are able to start trading right away.
Less Admin Involved
Working as a Sole Trader holds a lot less administrative responsibilities. You will need to keep a record of sales and expenses to calculate your tax return correctly, but that is all that is needed for your self-assessment submission. Should your turnover exceed £85,000 you will then have to be VAT registered and complete your VAT returns.
You Can Easily Change Your Business Structure Later On
Setting up as a sole trader initially gives you the flexibility to scale up later on. It may be more tax efficient to start off as a Sole Trader to begin with, but as you grow it make more sense to go limited. When the right times comes, making the switch from a sole trader to a limited company can be simple. Additionally, starting as a sole trader means you can dip your toes in the world of self-employment before deciding this is definitely the path you wish to take in your career.
How Can Onyx Help?
Please visit us at www.onyx.accountants or pop into one of our offices where a member of our team will be waiting to assist you.