Sole trader tax. *Shudder*<\/p>\n\n\n\n
Okay, maybe shuddering is a little dramatic. We\u2019ll help you navigate and understand what exactly a sole trader is, what taxes you need to pay as a sole trader and lots of entertaining bonus info, of course!<\/p>\n\n\n\n
We are the talkers of tax, after all, so read on to avoid any sole trader tax entanglements. <\/p>\n\n\n\n
A sole trader<\/a> is the official way of referring to a self-employed person in the UK. This means that as a sole trader, you\u2019re in charge of not only your business but also paying the tax you owe HMRC yourself, on time and correctly, too. <\/p>\n\n\n\n If you need help registering as a sole trader, read our guide on doing just that here<\/a>. <\/p>\n\n\n<\/div> \n\n There are a few different taxes that you need to get cosy with as a sole trader. How much tax you pay depends on how much you earn a.k.a profits after expenses<\/a> \ud83d\udcb0<\/p>\n\n <\/div>\n<\/div> \n\n Firstly, you\u2019ll need to pay Income Tax<\/a> to HMRC. Remember, to report your earnings and pay your taxes, you\u2019ll need to file a Self Assessment<\/a> tax return.<\/p>\n\n\n\n Depending on how much you earn in one tax year, you\u2019ll have to pay a certain percentage of tax. We know, we can\u2019t contain our excitement either\ud83d\ude13<\/p>\n\n\n\n As a sole trader, you need to pay Income Tax, National Insurance<\/a>, and potentially, Value Added Tax <\/a>(VAT). Luckily, it\u2019s quite straightforward, especially if you\u2019re on top of your bookkeeping<\/a> \ud83d\udc69\u200d\ud83d\udcbb<\/p>\n\n\n\n As mentioned above, Income Tax is paid depending on how much you earn during a tax year. Use our Income Tax calculator to estimate how much you might owe for this tax year. <\/p>\n\n\nWhat are the UK Income Tax rates for sole traders?<\/h2>\n\n\n\n
Income<\/strong><\/td> Tax rate<\/strong><\/td> <\/td><\/tr> \u00a30 – \u00a312,570<\/td> 0%<\/td> Personal allowance<\/td><\/tr> \u00a312,571 – \u00a350,270<\/td> 20%<\/td> Basic rate<\/td><\/tr> \u00a350,271 – \u00a3125,140<\/td> 40%<\/td> Higher rate<\/td><\/tr> \u00a3125,141 and over<\/td> 45%<\/td> Additional rate<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n What tax do I need to pay as a sole trader?<\/h2>\n\n\n\n
Income Tax<\/h3>\n\n\n\n