Manage your accounting needs smoothly with our accounting services for sole traders
You want much more out of your sole traders business than a great set of records and an on-time tax-return, don’t you?
About five million of us are now self-employed, freelancing, contracting or part of the big economy, whether as a main job or a side hustle.
While deciding to go solo, you have dreams about what you would like to achieve – it could be fame, fortune, security, a long and comfortable retirement – or any one of a hundred other things. And, if you’re anything like our other clients, what you really want is to turn those dreams of success into reality.
So that’s why we’ve used our skills with numbers, and the ideas of some of the world’s leading business thinkers and achievers, to develop a series of processes, systems and tools to help solopreneurs like you to become much, much more successful.
It’s also why one of the first things we will ask you when we meet is “what sort of success do you dream about?”
Generally, working as a self-employed sole trader means it’s just you and nobody else. However, at Heighten Accountants this is not the way we work.
We believe in teamwork – we will work together with you to ease some of your most important sole trader duties. You can delegate us all your accounting, cashflow, financing and tax minimisation obligations with full peace of mind.
The aim of Heighten Accountants is to provide an extraordinary service, which includes looking at ways to help you grow your sole trader business, save you tax, and make your business as easy, enjoyable and hassle-free to run as possible.
I am so glad that I chose Heighten as my accountant
I am so glad that I chose Heighten as my accountant when setting up my business and cannot recommend them highly enough. As a new business owner, I needed a lot of guidance and I have been fortunate to have the very knowledgeable team of accountants support me over the last few years. Without their advice, I would be truly lost! No question was ever too small or silly, they would respond quickly and with a high quality of advice. The prices are very competitive and the quality of service is excellent.
MD & Entrepreneur
Do It With Love
What are sole traders and their accounting requirements?
Sole trader is the simplest and a most popular business structure for start-up, micro trade or single owner business. Sole trader, self-employed, a non-limited entity, an unincorporated business and sole proprietor are often used as alternatives. Under Sole Trader, the business is owned by one single person.
Sole traders are allowed to run multiple businesses and could be a director, partner and an employee at the same time. Similarly, sole trader businesses can employ staff and get registered for a VAT scheme.
You are required to perform a number of duties to keep your sole trader business compliant, profitable and happily successful venture. Here is a quick list of accounting requirements:
- Statutory income tax reporting: As a sole trader, you’re taxed as an individual, meaning that you report your business income in your personal self-assessment tax return and pay tax at personal income tax rates.
- Record keeping: HMRC may check your bookkeeping records to make sure you’re paying the right amount of tax. You must keep your records for at least 5 years after the 31st January submission deadline of the relevant tax year.
- Making tax digital duties: You would be required to subscribe to a cloud bookkeeping software in order to easily raise invoices to your customers, get paid quicker, keep record of business expenses and stay MTD compliant. Cloud bookkeeping software also provides periodic reporting such as profit & loss to see your business financial position and monitor other business KPIs.
- Payroll compliance: Your sole trader business is required to register for payroll & pension schemes when you hire your first or subsequent team members. Monthly payroll reporting needs to be submitted to HMRC.
- VAT reporting: If sales for your sole trader business activities reach a VAT registration threshold then you must register for a VAT and choose a right scheme for your business. You can also register voluntarily for VAT anytime.
- Profitability & business growth: A well-documented business plan, a set of management accounts and cash flow forecasts can help you get funding and bring other partners and investors into your business. A benchmarking report highlights those areas where improvements can be made to your profitability and cash flow position.
- Business structuring and tax savings: Periodic business health checks, business structure review and incorporation save you money. You should also seek professional guidance to find out when is the right time to incorporate your sole trader business into a limited company. Also get in place a professional Fee Protection Insurance against the cost of HMRC investigation
Our sole trader accounting packages
We offer a bespoke accounting solution based on the industry you operate in as a sole trader. At Heighten Accountants, we provide expert services from our dedicated team of sole trader accountants, VAT experts, business consultants, and wealth management partners.
From award-winning cloud bookkeeping software platform to submitting a personal tax return and tax savings to business growth, Heighten Accountants has you covered.
Our fixed fee accounting packages for sole traders are tailored in a way your sole trader business works. And the great news is that the accountancy fee is fully tax allowable which means – subject to the rate of tax your company pays – the tax man will effectively be paying up to 50% of this fee.
We calculate your value-based fixed fee as per your circumstances and specific accounting requirements for your sole traders’ business. We have a range of easy direct debit payment options so you can match your payments to your own cash flow position.
Our value-based accounting packages for sole traders include:
- Prepare your financial statements and sole trader accounts
- Deal with all income tax matters, including tax computations
- Deal with your payroll and auto enrolment pension
- Prepare and submit VAT returns
- Prepare your self-assessment tax return and calculate the tax due
- Carry out a personal tax planning review
- Advice on choosing Sole trader accounting period and when to incorporate
The Best Start-up Accountants
I have pleasure meeting Heighten Team at their London office when I started my travel and cargo business. Their advice on company formation, payroll, VAT and tax was spot on. Their introduction to a local solicitor for company contracts was helpfull too. I found them the best in the town and recommend them without hesitation.
Accounting tips for Startups
As a part of fixed fee accounting services for sole traders, we also carry out reviews, which include the following to make sure that you and your sole trader business are on track to achieve everything you have set out to do:
- A growth review – we will explore the 6 key growth drivers with you to make sure that your sole trader business grows at the rate you want it to
- A TaxAbility review – to make sure that you don’t give the taxman more than your fair share of what you’ve earned
- A Wealth SustainAbility review – to make sure that what you’ve earned keeps on growing, and that some disaster doesn’t suddenly take it all away from you
- An accounting system review – to make sure that you harness the full power of 21st Century technology to give you more control of your business
- A finance options review – to make sure that your plans are paid for in the most cost-effective way possible
- An exit planning review – to make sure that you can leave the business when you want, with the money you want, and that it carries on in the way you want after you have gone
Our accounting package for sole traders is fully inclusive of unlimited access to our entire team for advice on ad-hoc matters. This means that you can call on us at any time knowing that you will never be charged for our time or advice.
How our Sole Traders accounting service works
Our sole trader expert accountants and tax advisors have specialist skills in advising start-up sole traders, and one-person small businesses.
Our personalised Tax Planner is designed particularly for small business owners and sole traders to make sure that you always set aside enough money to meet your eventual tax bills.
Our complimentary annual TaxAbility checklist and follow-up TaxAbility review help you to cut your personal and business tax bills down to size.
It helps sole traders both survive and thrive in a world of increased compliance and regulations having a dedicated and expert accountant onside will help massively with your duties as a sole trader.
Our sole trader accounting package is designed specifically for your self-employed business needs and it works in very simple 3 steps:
- Book a free consultation with us to discuss your sole trader business needs
- Get a custom-tailored and personalised value based fixed fee plan
- Achieve your desired entrepreneurial happiness and financial freedom
Hassle free Switching – Changing over to us couldn’t be easier. Our FREE ‘Switching Made Easy’ service will help you to sort out all the paperwork quickly and easily – guaranteed
Onboarding with Heighten Accountants
Your journey with Heighten Accountants starts with ‘getting to know you meeting. Our dedicated team of sole trader accountants will carefully listen to your accounting needs to tailor a bespoke solution for you. Our value based fixed fee plan ensures that you pay the right fee only for the services you need.
The overall journey with us will look as follow:
- You’ll accept the tailor-made personalised proposal
- You’ll be assigned with a dedicated sole trader business accountant
- We discuss your tax return, payroll, VAT, and other accounting needs
- We advise you on business structure, bank account & fundraising
- We will set up Cloud Bookkeeping platform to raise instant invoices
- We conduct regular board-view meetings with unlimited tax advice
- You delegate your all accounting duties and relax
Over 20 Years’ Experience
We’ve been supporting sole traders like you for over 2 decades and have unparalleled experience and expertise. We invite anyone operating as a sole trader to get a non-obligation competitive quote from us today. It’s quick and easy!
By trusting the Heighten team your small business sole trader accounting will become seamlessly effortless and hassle-free.
We keep your admin to a minimum and assist you to make your business a happily successful and self-managing venture.
Accounting tips for Sole Traders
Book a pre-end planning meeting early with your accountants. If you are thinking of investing in any fixed assets, such as vehicles, computers and equipment etc. it may be appropriate to do this just before your year-end to get your tax relief earlier.
- For other expenses like maintenance, marketing and training it is also more sensible to spend this just before the year-end. Please remember, though, that tax is only part of the story. You should also look closely at the commercial viability of tax planning before making any decision.
- Educate yourself on incorporation of your sole trader business. Recent changes in the tax rules have made trading through a limited company very tax efficient even with small profits. If you would like to arrange a free meeting to discuss whether setting up a limited company is right for you please call us.
- Consider changing your year-end if it does not end on 31st March. There are often tax advantages with changing your accounting year-end to 31st March. If you would like to discuss these advantages please feel free to contact us.
- Computerisation of your accounting systems can help you carry out effective pre-year end tax planning. You may also benefit from lower bookkeeping fees by using technology.
- Buying a car or a van on your business comes with some tax breaks. Electric cars could also be significantly tax efficient. Beware of benefit in kind tax for private usage. Seek professional advice before investing in a vehicle as there are various factors you first need to consider.
- You can register your sole trader business for VAT anytime.The key benefits of being VAT registered include increased and better cash flow. Once registered, you can claim back your VAT costs. If your set-up costs are high and include a VAT element, claiming that back can make a huge difference.
Professionalism, Quality, Responsiveness, Value
I have been working with them for last 20 years for my personal, business, tax and accounting work. I have found them very professional and resourceful. Initially, I found them a bit pricey but they justified their fee by bringing a lot of value to my business. I appreciate the support from their passionate team and have already recommended them to most of my business friends.
Innovative Constructions & Build
Sole Traders accounting FAQs
A sole trader structure provides you absolute control over your business, its assets, and profits after tax. Alongside this control, this business model offers comparative simplicity and versatility.
Advantages of setting up a business as a Sole Trader
Three reasons why Sole Traders are often successful
The simple answer is yes. Legally your sole trader business does not have to have an accountant. So, if you can do your own accounting indefinitely, then why should you hire accountants?
The answer is simple. As a frontrunner, delegating is important because you can’t and shouldn’t do everything yourself especially if you are looking to develop a sustainable, happily successful, self-managing, and self-multiplying business.
Delegating to your accountants makes good business sense because it can save you time and money. Hiring in-house finance personnel might not be affordable, especially with the additional costs of accounting software to factor in. Instead, outsourcing to a professional accountancy service firm for tax advice, accounting, and bookkeeping is far more feasible.
At Heighten we offer a lot of other services to sole trader businesses because we know your business is a lot more than submitting a Tax Return or completing a set of accounts.
Remember, your business is a lot more than just submitting a tax return. When you hire us to complete your self-employed tax return, we offer a lot of other services to make sure you achieve your financial goals and become a happily successful individual.
The sole trader’s financial statements include a balance sheet, profit & loss, cash flow statement, and change of owner’s equity statement. However, sole traders are not required to prepare these reports for regulatory purposes. Sole traders are required to maintain a proper record of income and expenses for tax returns only. Financial statements are only mandatory for limited companies.
A simple profit and loss with adequate records to complete a self-assessment tax return fully and accurately are all required to meet statutory obligations for a sole trader. Maintaining proper records enables you to manage your business as well as provides an audit trail for tax purposes
However, there are key benefits to producing formal accounts. If you are looking to grow your business, intend to approach a lender to negotiate to finance your business, or need a mortgage, for example, most institutions will ask to see three years’ accounts.
Make sure that you consider completing everything on this checklist when you incorporate your existing sole trader business:
You may seek professional advice while considering the transfer of a business as a going concern.
If you have applied for a loan or mortgage and been asked to provide a set of accounts by your financial institution, this quick guide will help you understand the basics. The final accounts for a sole dealer business are the Profit and Loss and the Balance Sheet.
The financial statements may be prepared directly from your cloud bookkeeping software or from a trial balance (synopsis of all transactions) plus various adjustments. Your financial statement should show the report name and period at the head.
The simple format of your profit and loss report will include; total sales, less direct costs such as material and cost of sales and this will give you a gross profit amount. From gross profit you then deduct all other overheads such as wages, rent, utilities, financial costs to get net profit for your sole trader business.
You may do the following steps to prepare your balance sheet; round down every current asset such as stock, debtors and cash at bank, record all short- and long-term liabilities such as creditors and loans, balance the report by calculating owner’s capital injection and drawings.
You don’t need a business bank account if you’re a sole trader.
As a self-employed, you can use your normal bank account, however, there are times when you need to use a business account, as it’s much easier to separate your finances.
It is a good practice to keep your personal and business matters separate. It’s fair to say that life as a sole trader can be a bit of a balancing act and every penny matters at the early stage of your business.
There are banks who provide a free sole trader bank account whether you’re self-employed, sole trader or happily side-hustler.
So, what is the difference between a business and personal bank account? There’s nothing really special about a business bank account at its basic level, but it’s one you open solely for your business income and expenditure and can be used initially as your money in, money out account.
Free digital business bank accounts can easily connect your accounting software to tackle the numbers directly from your bank account, on desktop or mobile thus saving you in bookkeeping costs. A business account can range from its simple functionality to an account that helps you issue invoices, run payroll when you hire people, and help with your accounting and tax return.