What is Sole Trader?

A sole trader is the simplest form of self-employment in the UK. You trade as an individual, keeping all profits after tax but also bearing personal liability for all debts. You must register with HMRC and submit a Self Assessment tax return each year, paying Income Tax on profits and Class 2/4 National Insurance. There is no requirement to register with Companies House, and there is far less administrative burden than running a limited company. Many tradespeople, consultants and freelancers start out as sole traders.