Sole traders must register for Self Assessment with HM Revenue & Customs (HMRC) and follow certain rules on running and naming their business.

Sole traders

If you’re a sole trader, you’re running your own business as an individual. You can keep all your business’ profits after you’ve paid tax on them.

You can take on staff - ‘sole trader’ means you’re responsible for the business, not that you have to work alone.

How to register for Self Assessment

You must register for Self Assessment with HMRC as soon as you can after starting your business.

You should register by 5 October following the end of the tax year that you need to send a tax return for. This way, you’ll have enough time to complete registration before the tax return and any tax is due.

Example
If you start your business during the 2012 to 2013 tax year, register by 5 October 2013.

Your responsibilities

You’re responsible for:

  • your business debts
  • bills for anything you buy for your business, like stock or equipment
  • keeping records of your business’ sales and expenses
  • sending a Self Assessment tax return every year
  • paying Income Tax on the profits your business makes and National Insurance

Naming your business

You can use your own name or trade under a business name. There are rules on using a business name. For example, you can’t:

  • use the terms ‘Limited,’ ‘Ltd’, ‘public limited company,’ ‘plc,’ ‘limited liability partnership,’ ‘LLP’ or their Welsh equivalents
  • use sensitive words or expressions unless you have permission
  • suggest a connection with government or local authorities
  • use a name that is too similar to a registered trademark
  • be offensive

You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.