Fundamentally, a sole trader is a sole owner of the business and is a self-employed person. Operating as a sole trader is the most convenient way to start business and because of its simplicity, sole trader is the most popular business structure.
A type of business structure that has a separate legal identity from its shareholders and its directors is known as a Limited company structure. The guidelines remain the same for a limited company even if it is run by an individual.
Sole Trader or Partnership | Limited Company (shareholder / director) |
---|---|
An individual is the sole owner of the business |
The business is a separate legal entity from the owner / shareholder of the business |
In case of a legal dispute the owner of the business will be sued |
In case of a legal dispute the company will be sued. In the United Kingdom, it is very rare that somebody can sue a director for the firm’s default. Exceptional scenarios when a director may be held accountable are:
|
Employment status:
|
Employment status:
|
Tax on profits:
|
Tax on profits:
|
Losses:
|
Losses:
|
Extracting profits
|
Extracting profits
|
Borrowing
|
Borrowing A director can borrow money from the company, under certain limits laid down under Companies Act 2006:
|
Pension
|
Pension
|
Insolvency
|
Insolvency
|
Selling the business Under the Capital Gains Tax (CGT) rules, if the business or any assets used in the business are sold sole traders are personally taxed for any gain |
Selling the business There is a double tax charge on shareholders, when the business or assets are sold. The company pays corporation tax |
General expenses:
|
General expenses:
|
Cars and fuel
|
Cars and fuel
|
Mobile phones
|
Mobile phones
|
Charging rent for use of home
|
Charging rent for use of home
|
DNS Accountants is a skillful team of accounting and taxation professionals that helps clients with services ranging from tax planning to self assessment to business set-up. The firm helps owner managed small business and private individuals across the United Kingdom. DNS is an acknowledged firm of ACA’s or Chartered Accountants (CA) and the firm takes pride in saying that we are very helpful to our clients & deliver unmatched customer service and constantly help clients to manage their wealth. The firm’s learned team focuses on helping sole traders with business registration, tax filings and other services such as self-assessment, payroll management and bookkeeping. At DNS, we are constantly in touch with our clients and offer
DNS Accountants offers taxation & accounting services to owner managed businesses and freelancers / contractors. For business owners and freelancers / contractors, it is difficult to keep pace with the ever changing government regulations and rules. Our expert team of chartered accountants and taxation professionals help clients in services ranging from bookkeeping to payroll to tax planning, and filing tax returns. DNS Accountants help clients focus on maximizing their wealth.
Get the best advice on tax savings, accounting services, payroll, self assessment, VAT and more, whether you want to call us directly, request a call back or chat online with our experts, rest assured that we will always give you the best advice.If you have any questions, or would like to speak to us in person, please do get in touch. We're here to help.
DNS Accountants
DNS House, 382 Kenton Road,
Harrow, Middlesex, HA3 8DP
“I recently starteed my own company and in need of a good accountant. With my friends reference, I started DNS accountancy services and I am a quite satisfied with their service. My account manager Sneha Gurudutta was always responsive and guided me a lot especially during my company early days. Keep u the good work.”
“I have been DNS for the last 3 months and I am very happy with the service. My account manager Sneha Gurudutta guided me and helped me with all the major/minor steps with the account setup. The weekend support they provide is really helpful. I would definitely recommend DNS to all my friends.”
“Unfortunately my son passed away without leaving any contact name of his accountant. I was able to make contact with the firm through HMRC. The staff were very prompt, caring and supportive in settling his income tax account. I was extremely impressed with the efficient caring and supportive service received from all of DNS staff.”
“Been with DNS Accountants for more than a year I would highly recommened their services. My account manager Sneha has been very helpful and helped with accounts and queries swiftly always! Having a good accountant means you can fully focus on your business, not worry about accounts and tax matters. Thank you DNS :-)”
“I have been extremely satisfied with the service I have been receiving close to past 1 year. Very professional, transparent and helpful. Special mention of my Account Manager Minakshi Arora who made my transition very smooth and always ready to go that extra mile to support and make customer happy. Definitely recommended.”
“I've recently set up a Ltd. Company and signed up with DNS for my accounting services. I've found it very good value for money and hugely helpful in terms of advice and guidance. I have a named Account Manager, Sneha Gurudutta, who keeps in contact with me and offers advice on line and on the phone... I'm really pleased with the service.”