If you are considering self-employment or starting a business, then being a sole trader is often the simplest and cheapest way of setting up and running a business. It will give you flexibility and control over how you run the business, but its worth noting that you will be personally responsible for its success or failure, and you will also be responsible for any business debts.

Sole traders must contact HMRC for self assessment registration and maintain accurate accounting / bookkeeping records, but they don’t have to register the company with Companies House.

How to register for self assessment as a sole trader dns accountants
As a sole trader you will have to pay income tax and file a self-assessment tax return with HMRC every tax year. This blog gives you more information about registering as a sole trader and being self employed, filing tax returns and the tax you will have to pay.

What’s the difference between a sole trader and self-employed?
Not all self-employed people are sole traders. But if you operate your business as a sole trader you are classed as a self-employed person and will need to submit a HMRC self assessment return each year.

If you’re self-employed but own a business as a business partnership or a limited company, you’re not classed as a sole trader.

How do you register for self assessment?
There are different ways to register for HMRC self assessment depending on if you are self-employed, not self-employed or registering a partner or partnership.

How you register as self-employed will depend on if you have sent tax returns previously to HMRC.

If you have not filed a tax return before
Register for Self Assessment and Class 2 National Insurance through your business tax account. You’ll need a Government Gateway user ID and password to sign in. If you do not have a user ID for a business tax account, you’ll be able to create one.
You’ll receive a letter with your Unique Taxpayer Reference (UTR) number within 10 days (21 if you’re abroad). You’ll need your UTR to file a return.
You’ll receive a reminder letter or email telling you to complete a Self Assessment tax return before it’s due.
You can file your tax return any time before the deadline.