What Is A Sole Trader?

What Is a Sole Trader?

If you are working as a contractor it may be beneficial for you to become a sole trader. Futurelink Group are here to help and provide information on what a sole trader is!

The term ‘sole trader’ describes a type of legal structure for a business in the UK. A sole trader, also known as a sole proprietorship, is a business which is owned and run by one person. For legal and taxation purposes, there is no distinction between the person and the business. This means that a sole trader has the right to any profits made by the business, once they have met their tax obligations of course, but they are also personally liable for any losses it may incur. It is estimated that around 62% of all business in the UK operate on this basis.

Sole traders might traditionally have been tradespeople or those setting up a small business to sell their own goods or other services. However, with new ways of working becoming more and more widespread, all sorts of people are becoming self-employed sole traders. Not all of them want to be burdened with handling their own invoicing and tax affairs, however, and that’s where companies like ours come in.

Find out how Futurelink Group can help sole traders.

What sorts of people are sole traders?

Permanent jobs are not as plentiful as they once were so many people now earn their living as contractors, often via a recruitment agency, rather than being directly employed by the company they work for. This way of working is quite commonplace in a wide range of industries such as information technology, sales, engineering and construction to name but a few. There is also a thriving freelance market where people may sell their services for a specific project for an agreed price.

All of these people are effectively self-employed and will typically fall within the legal structure of a sole trader. The sole trader structure is usually the simplest and easiest to adopt, however it does still carry certain obligations.

What are the responsibilities of a sole trader?

As a sole trader you will be responsible for:

  • Completing an annual Self Assessment tax return and paying tax on any profits above the personal allowance threshold*
  • Paying fixed-rate Class 2 National Insurance Contributions (NICs) *
  • Paying Class 4 National Insurance Contributions on annual profits from £7,956 (2014/15) *
  • Paying UK VAT if your turnover is higher than £81,000 (2014/5) *
  • Making your own pension arrangements

* Further information is available on HMRC website.

Futurelink Group provides a choice of sole trader solutions to relieve them of the worry of collecting payments from their client or recruitment agency. We can also take care of your tax and VAT affairs if you wish and we can also provide a range of other benefits. Registration is quick and easy via our website, or if you prefer you can give one of our team a call on +44 (0)1923 277 900.

“I’ll most certainly pass on your details to people I know. You run a great service there, keep up the good work.”

William Cadden, Self-Employed Contractor

“For me, Futurelink Group was the best solution, as a foreign and a lack of knowledge of the UK rules, they were extremely helpful in all aspects. Always fast in answering all my questions. I almost didn’t do anything and they put me on track to invoice and receive my payments. I can fully recommend them.”

Ronaldo, Umbrella PAYE contractor

“WS Contractors Ltd are extremely happy with the services that Futurelink provide. The efficient and friendly staff are always willing to help and assist. The feedback from our operatives is positive and pleasing. We would recommend Futurelink to all new recruits joining our team.”

Michelle Hughes, WS Contractors Ltd

“We at Gemini would like to thank you and your team for all your help and support in connection to payroll solutions. We find Futurelink Groups approach to be responsive to action when required with a courteous and bright manner – keep up the good work!”

Frank Mcfarlane, Gemini Security Services Ltd

We have strict compliance procedures in place, we are ISO:9001 accredited and we also carry out regular independent audits of our processes so you can be sure you are in safe hands. Companies within our group have been accredited with the following:

Futurelink Group consists the following companies, all incorporated in England & Wales: Futurelink Group Ltd (0620 6129), Futurelink Accountancy Services Ltd (0532 0147), Team Construction Ltd (0493 5270), Horizon RCS Ltd (0620 6202) and Horizon RCS Europe Ltd (0620 6136). Privacy Policy | Terms & Conditions