Sole traders must register with HM Revenue and Customs (HMRC) and follow certain rules on running and naming their business.
If you’re a sole trader, you run your own business as an individual and are self-employed.
You can take on staff - being a sole trader means you’re responsible for the business, not that you have to work alone.
You’re responsible for:
- keeping records of your business’s sales and expenses
- sending a Self Assessment tax return every year
- paying Income Tax on your profits and Class 2 and Class 4 National Insurance - use HMRC’s calculator to help you budget for this
- your business debts
- bills for anything you buy for your business
- registering for VAT if your turnover reaches the VAT threshold
- registering with the Construction Industry Scheme (CIS) if you’re a contractor or sub-contractor in the construction industry
Naming your business
You can use your own name or trade under a business name - read the rules for naming your business.
You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.