The Financial Implications of Becoming a Sole Trader

A sole trader is someone who works alone. They may be someone who completes work for other companies or they may run their own business as a single person. Registering as a sole trader doesn’t cost anything in itself and anybody can register. However, there can be some financial implications that need to be considered.

If somebody sets themselves up as a sole trader, they will no longer have an employer. They will need to source all of their own work and contracts, so they will have no financial help available to them. If they need support in future, such as maternity pay or sickness pay, the rules and regulations will be different. The sole trader will also be responsible for their own taxes and they will need to fill in a self-assessment for each tax year that they work. They may need to pay a bookkeeper or accountant to help with this.