{"id":111,"date":"2019-05-28T14:01:46","date_gmt":"2019-05-28T13:01:46","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=111"},"modified":"2026-01-28T07:50:50","modified_gmt":"2026-01-28T07:50:50","slug":"setting-up-as-a-sole-trader","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/self-employed-tax-returns\/setting-up-as-a-sole-trader\/","title":{"rendered":"All your questions on setting up as a sole trader answered"},"content":{"rendered":"\n<p><strong>Setting up as a sole trader<\/strong> can feel overwhelming with all the rules, deadlines, and responsibilities to juggle. But don\u2019t worry, we\u2019re here to help you make sense of it all. From tax forms to deadlines, we\u2019re answering all your questions, so you can get on with the exciting part: running your business! \ud83e\uddd1\u200d\ud83d\udcbb<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">1. How do I know if I need to set up as a sole trader?<\/h2>\n\n\n\n<p>Simple! You\u2019ll need to set up as a sole trader if:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>You earned over \u00a31,000 from self-employment in the past tax year.<\/li>\n\n\n\n<li>You need to prove you\u2019re self-employed (for example, to claim Tax-Free Childcare \ud83e\uddd2).<\/li>\n\n\n\n<li>You want to make voluntary National Insurance contributions to qualify for benefits or a full state pension.<\/li>\n<\/ul>\n\n\n\n<p>So, when should you actually get around to<strong> setting up as a sole trader<\/strong>? The answer is, as soon as you meet any of these criteria!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">2. Is self-employed the same as sole trader?<\/h2>\n\n\n\n<p>In short, yes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Self-employed means that you do not work for an employer and you don\u2019t pay tax through <a href=\"https:\/\/taxfix.com\/en-uk\/what-is-paye\/\" target=\"_blank\" rel=\"noreferrer noopener\">PAYE<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/sole-trader\/\" target=\"_blank\" rel=\"noreferrer noopener\">Sole trader<\/a> is the formal name for your self-employed business<\/li>\n<\/ul>\n\n\n\n<p>They\u2019re the same thing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3. Can I be both employed and self-employed?<\/h2>\n\n\n\n<p>Yes! You can work for an employer as well as yourself. Let\u2019s look at a quick example:<\/p>\n\n\n\n<p>Nadia works for Starbucks full-time as well as running her small business. Nadia is employed and self-employed.&nbsp;<\/p>\n\n\n\n<p>Her Starbucks income is taxed through PAYE before it arrives in her bank account. But she\u2019ll have to file a tax return for her self-employed income.&nbsp;\ud83d\udcdd<\/p>\n\n\n\n<p>PS: You\u2019ll also have to work out how much tax you owe on your self-employed income by yourself.&nbsp;<\/p>\n\n\n\n<p>See more details about being both employed and self-employed <a href=\"https:\/\/taxfix.com\/en-uk\/employed-and-self-employed\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">4. When do I need to register as a sole trader?<\/h2>\n\n\n\n<p>You can register after you\u2019ve earned your first \u00a31,000 from self-employment. The \u2018hard deadline\u2019 for <strong>setting up as a sole trader<\/strong> is 5th October of your second tax year.<\/p>\n\n\n\n<p>You\u2019ll have to pay your tax bill by 31st January (if you opt to file a paper tax return, the deadline is 31st October.) \ud83d\udcc5<\/p>\n\n\n\n<p>If you earn less than \u00a31,000 in the tax year, you don\u2019t need to do a tax return.<\/p>\n\n\n<div class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_how-to-file-a-tax-return.png\" width=\"1280\" height=\"672\" srcset=\"https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_how-to-file-a-tax-return-300x158.png 300w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_how-to-file-a-tax-return-1024x538.png 1024w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_how-to-file-a-tax-return-768x403.png 768w, https:\/\/taxfix.com\/en-uk\/wp-content\/uploads\/25Q3_TS_Rebrand_UK_Website_Content_Blog-and-guides_how-to-file-a-tax-return.png 1280w\" class=\"wp-block-image__media\" sizes=\"auto, (min-width: 1000px) 768px, calc(100vw - 48px)\" alt=\"How to file a tax return\"><\/div>\n\n\n<h2 class=\"wp-block-heading\">5. Can I register in advance?<\/h2>\n\n\n\n<p>Yep, but only 28 days before you start your work (this is the limit).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">6. Do I need to register every year?<\/h2>\n\n\n\n<p>Nope! Once you\u2019re done <strong>setting up as a sole trader<\/strong>, you won\u2019t need to register again. However, if you didn\u2019t file a tax return the previous year but now need to, you will need to re-register for Self Assessment. \u270d\ufe0f<\/p>\n\n\n\n<p>If you stop being a sole trader, remember to inform HMRC. Otherwise, they\u2019ll still expect you to submit a tax return.Find out more about how to stop being self-employed <a href=\"https:\/\/taxfix.com\/en-uk\/how-to-stop-being-self-employed\/\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<br><\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-cta-mini m-purple m-align-left\">\n    \n    <div class=\"b-cta-mini__content\">\n\n        \n        <h2 class=\"b-cta-mini__title\">Need help filing?<\/h2>\n\n        \n        \n        <div class=\"b-cta-mini__body\">\n            <div class=\"b-block-body\"><p><span style=\"font-weight: 400;\">Don\u2019t worry, we\u2019ve got you covered! Our team of accredited accountants will take care of your tax return, making the process quick and easy &#8211; no confusion, no hassle. <\/span><\/p>\n<\/div>\n        <\/div>\n\n        \n        \n        <div class=\"b-cta-mini__action\">\n\n            <a href=\"https:\/\/taxfix.com\/en-uk\/assessment\/companyReturn\" class=\"c-button m-large  m-mobile-fullwidth\">Get started<\/a>\n\n\n        <\/div>\n\n        \n    <\/div>\n<\/div> <!-- .b-cta-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<p>Find out more about how to stop being self-employed <a href=\"https:\/\/taxfix.com\/en-uk\/how-to-stop-being-self-employed\/\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">7. How should I name my sole trader business?<\/h2>\n\n\n\n<p>When setting up as a sole trader, you can either trade under your own name, or you can choose another name. The choice is yours!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">8. Do I also need to register for VAT?<\/h2>\n\n\n\n<p>You\u2019ll need to register for VAT only if you meet any of the follow criteria:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Your turnover will be over \u00a390,000 (the \u201cVAT threshold\u201d)<\/li>\n\n\n\n<li>You sell to other VAT-registered businesses and want to reclaim VAT<\/li>\n<\/ul>\n\n\n\n<p>Find out how to register for VAT <a href=\"https:\/\/www.gov.uk\/register-for-vat\/how-register-for-vat\">here<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Ready to Get Started?<\/h3>\n\n\n\n<p><strong>Setting up as a sole trader<\/strong> doesn\u2019t have to be overwhelming! Once you\u2019ve earned your first \u00a31,000 from self-employment, you\u2019ll know it\u2019s time to register, with a hard deadline of 5th October in your second tax year.<\/p>\n\n\n\n<p>Need a hand filing your tax return? Let us help!<strong> \ud83d\ude4b<\/strong> Our accredited accountants can sort your Self Assessment efficiently and accurately, find out more <a href=\"https:\/\/taxfix.com\/en-uk\/services\/\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Setting up as a sole trader can feel overwhelming with all the rules, deadlines, and responsibilities to juggle. But don\u2019t worry, we\u2019re here to help you make sense of it all. From tax forms to deadlines, we\u2019re answering all your questions, so you can get on with the exciting part: running your business! \ud83e\uddd1\u200d\ud83d\udcbb 1. [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[441,440],"tags":[414,102,411],"class_list":["post-111","post","type-post","status-publish","format-standard","hentry","category-general-self-employed-tax-faqs","category-self-employed-tax-returns","tag-employment-status","tag-hmrc","tag-self-employed"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>All your questions on setting up as a sole trader answered &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"Setting up as a sole trader? 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