Sole traders must register with HM Revenue and Customs and follow certain rules on running and naming their business.
If you're a sole trader, you're running your own business as an individual. This is known as being ‘self-employed'. You can keep all your business' profits after you've paid tax on them.
You can take on staff - ‘sole trader' means you're responsible for the business, not that you have to work alone.
Register for Self Assessment
You must register for Self Assessment with HMRC as soon as you can after starting your business.
- your business debts
- bills for anything you buy for your business, like stock or equipment
- keeping records of your business' sales and expenses
- sending a Self Assessment tax return every year
- paying Income Tax on the profits your business makes and National Insurance
- registering for VAT if your turnover reaches the VAT threshold
- registering with the Construction Industry Scheme 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. You don't have to register a business name if you're a sole trader but there are rules on using a business name. For example, you can't:
- use the terms ‘Limited,' ‘Ltd', ‘public limited company,' ‘plc,' ‘limited liability partnership,' ‘LLP'
- use sensitive words or expressions unless you have permission
- suggest a connection with government or local authorities
- use a name that is too similar to a registered trade mark or an existing business in the same area or sector
- be offensive
You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.