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Sole-Trader - Self employment

Thinking about being a sole trader? No surprise there as it's the simplest business structure you can choose:

-You and your business are effectively one and the same.

-You are taxed on all the profits you make and they are yours to keep.

-You only need to prepare a self assessment tax return.

-Full privacy as your details and profit/loss aren't public.

-You can offset your losses against PAYE income.

That's why it's very popular for new businesses. It's easy to open and close and also relatively cheap to maintain. However, there are some negative factors that should be considered:

- You are liable for all the debts personally.

-It can be less tax efficient when passing a certain level of profit.

- Less credibility as some businesses prefer to work with limited companies.

- Impacts on your credit score. Think about it if you plan on securing a mortgage or taking a bank loan.

If you're considering opening up your business and have a dilemma, contact us. Remember to follow us for more advice about running a business.We will take a deeper look into all business structures in the next weeks. To know more about business types in the UK, follow us. For 1:1 advice about different options, contact us


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