Sole Traders

Whether you are already trading or considering starting a business as a sole trader, TaxSmart offer a total solution for accountancy services and tax advice for self-employed individuals.

The main advantages of setting up as a sole trader are:

• In Business for yourself – You have control over the business. Decisions can be made quickly and easily making your business very responsive to changing situations.
• Ability to change – It is relatively simple to change the business format to a limited company as and when this is beneficial.
• Keep the profit – As a sole trader, all the profit belongs to you.
• Privacy – As a sole-trader, unlike a limited company, your accounts are not made public and therefore customers and competitors cannot see what you are earning.

Sole traders are often successful because:

• They can offer a more personal approach – A smaller business can often have closer contact with their customers and develop a close relationship offering a high level of service and customer care.
• More responsive to their customers – The fact that you make the decisions allows you to react more quickly to customer needs than a larger business could.
• Local Focus – Small local businesses will be closer to the community and can develop good business relationships with their knowledge of the area and local issues.

The main disadvantages of being a sole trader are:

• You are personally liable and accountable for all your businesses debts – If your business was to fail you could end up losing your personal assets such as your home, car, etc.
• Raising finance – Sometimes, when you run a small unincorporated business, banks will not lend you large sums and you may it difficult to raise funding for the business.