A sole trader is the simplest of all business structures and very easy to start, requiring only that you register with HMRC within 3 months of commencement date.

Benefits:

		easy record keeping
		profits of the business belong to you, subject to tax and national insurance
		can have employees
		can change status to, for example, a limited company at a later date if required

Responsibilities:

		preparation of annual accounts
		annual tax return to HM Revenue & Customs
		payment of tax to HM Revenue & Customs
		payment of fixed rate (class 2) national insurance to HM Revenue & Customs
		payment of class 4 national insurance to HM Revenue & Customs, based on annual profits

A sole trader is personally responsible for business debts, putting your home and possessions at risk.