Sole Traders

Sole traders are single individuals who are the owners and controllers of their businesses, as well as they are responsible for profits and loss of their business by themselves. Which means that the business owner is personally liable to pay any expenses an debts incurred by the business. By law and in all legal terms, the sole trader and the business are one organization.

Following four important things should be considered if you are a sole trader.

Personal Responsibility

Sole traders take an economic risk and financial danger during start-up just like other businesses set up. They start it with their own individual capital contributions for running a business.

Sole traders’ responsibility is to provide the extra funds required in those areas where business needs extra investment.  Even if business has got financial problems, or if business is not able to make profit but still the owner has legal responsibility to pay all debts at the end of a fiscal year.  Similarly, the sole trader is responsible to answer to the court in case if the business faces criminal charges. The individual will serve whatever sentence the court passes.

Tax Returns

It is the responsibility of a sole trader to register the business and make income tax contributions for meeting all tax solutions. And   on annual basis, good accounting services are helpful to generate tax returns for the sole traders. Because accounting and tax solutions follow the law and aid about tax returns properly and in a timely fashion. Good accounting and finance are helpful to comply with these regulations otherwise it may result in hefty punitive penalties or even imprisonment. Accounting and finance practices are helpful for sole trader for paying the National Insurance Contributions after three months of operation. These are regular monthly payments to the tax authorities that warrant certain benefits such as the maternity payment.

Value-Added Tax

 Good accounting practices and tax solution organizations provide assistance to Sole traders in this way that they are able to register their businesses for performing all tax obligations.  While, the tax authorities encourage small-scale sole traders and businesses to register for tax voluntarily by providing all the details to tax office and making payments accounts of all expenses by declaration of all income and expenses in the running of small business, Accounting and finance  encourage Sole traders to prevent heavy penalties that may result from undeclared income and late registrations.

Business Operations and workings 

 Accounting companies provide assistance for fulfillment of all the responsibilities for the sole traders to adhere to the stipulated rules and regulations of business practice.  Which means, Sole traders have a duty to inform and register the business premise with the local authority to get proper documentation and licenses. Sole traders with employees are responsible for taxing and remitting the employees’ income. They also must ensure suitable working conditions and that the employees receive proper treatment and wages.