[səʊl ˈtreɪdə]
Sole Trader is the legal term used by HMRC for people earning self-employed income in the UK. They must file a Self Assessment to deal with tax obligations.
A Sole Trader is an individual who runs their own business as a Self-employed person in the UK. They are solely responsible for the management and financial obligations of their business.
A Sole Trader has a tax-free allowance of £1000 per year called the Trading Allowance. If they earn more than this allowance, the individual must register as a Sole Trader with HMRC by 5th October, keep records of income and expenses, and file a Self Assessment at the end of a Tax Year.
They can be liable for mistakes made by the company and have to pay business debts with their personal funds if needs be.
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