Being a sole trader is the simplest way to run a business.

At Marriotts we aim to help you achieve your business goals, increase your profits and minimise your tax liabilities. Many of our customers are sole traders. Many decide to become limited companies, especially when the business grows and their liabilities increase.

As a sole trader, you do not pay any registration fees. Keeping records and accounts is straightforward, and you get to keep all the profits. But you are personally liable for any debts that your business runs up, which can make this a risky option for businesses that need a lot of investment.

• You make all the decisions on how to manage your business.
• You raise money for the business out of your own assets, and/or with loans from banks or other lenders.
• You have to make an annual self assessment tax return to HMRC.
• You must also keep records showing your business income and expenses.
• As you are self-employed, your profits are taxed as income. You need to pay fixed-rate Class 2 National Insurance contributions (NICs) and Class 4 NICs on your profits. 
• As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble.