How Do I Get Started with Sole Trader Accounting
As a sole trader, you are the business. That means your accounting doesn’t need to be complicated—but it does need to be accurate, consistent, and compliant . Step 1: Understand What You’re Responsible For Sole Trader Accounting must: ✔ Track all business income ✔ Record allowable business expenses ✔ Keep proper records ✔ Submit an annual Self Assessment tax return ✔ Pay Income Tax and National Insurance Good records = less tax stress and fewer surprises. Step 2: Register as a Sole Trader Before trading (or shortly after starting): ✔ Register with the tax authority (e.g. HMRC in the UK) ✔ Get your Unique Taxpayer Reference (UTR) ✔ Set up your online tax account This ensures you can file tax returns and pay what’s due. Step 3: Separate Business and Personal Finances While not legally required, this is strongly recommended . ✔ Open a separate business bank account ✔ Use it only for business income and expenses Benefits: Easier bookkeeping Cleaner tax rec...