Sole trader tax return services
Martax Accountants is an independent firm of Chartered Certified Accountants who specialise in providing sole trader tax return services.
A sole trader is self-employed individual who sets up and owns its own business. A sole trader or sole proprietor is a business owned and controlled by one person who takes all the decisions, responsibility and profits from the business they run. You may decide to employ people in your business but you will be the ultimately owner of your business.
As a sole trader you will have to manage your sole trader tax by completing your annual self assessment tax return form.
How to set up a Sole trader business?
Register as a sole trader if any of the following applies to you:-
Sole traders must firstly register with HM Revenue and Customs (HMRC) and follow certain instructions on running and naming their business.
To set up as a sole trader, you need to register for Self Assessment and file a tax return every year. This is a crucial part of the process and it has to be done correctly, whenever you have any concerns or questions about Self Assessment, or need help registering or filing, reach out to Martax accountants for our sole trader tax return services. We will direct you through the whole process and provide help and advice when needed.
What taxes do I have to pay as a sole trader?
As a sole trader in the UK, you will be required to pay income tax, Class 2 National Insurance and Class 4 National Insurance if your taxable profits are above a certain level.
Tax and NI Rates for sole traders
|Income Tax Rates 2021/22|
|Band||Taxable profits||Tax Rate|
|Personal allowance||Up to £12,570||0%|
|Basic rate||£12,571 to £50,270||20%|
|High rate||£50,270 to £150,000||40%|
|Additional rate||Over £150,000||45%|
|Class 2 Nation Insurance Rates 2021/22|
|Band||Taxable profits||NI payable|
|Small Profits Threshold (SPT)||Below £6,515 per year||0|
|Above SPT||Above £6,515||£3.05 per week|
|Class 4 Nation Insurance Rates 2021/22|
|Band||Taxable profits||NI Rate|
|Lower Profits Limit (LPL)||Below £9,568 per year||0%|
|LPL to Upper Profits Limit (UPL)||£9,568 to £50,270||9%|
|Above UPL||Above £50,270||2%|
As a sole trader, you are required to prepare and submit your sole trader tax return and pay any tax (if any) to HMRC by 31 January following the end of the tax year.
For example, for the tax year 2018/19 (Period: 6 April 2018 to 5 April 2019), you will be required submit your tax return and pay your tax liability (if any) by 31 January 2020.
Being a sole trader, you have certain responsibilities such as: