A sole trader is the simplest way to get into business as there is no formal or legal processes to set. If you decided to start your own business you would automatically be classified as a sole trader
until you chose to enter into a partnership or incorporate your business as a company. As a sole trader you will be taxed through your own IRD number and are personally entitled to all profits, but are also personally liable for all business taxes and debts. Most common sole traders include trades people like plumbers and electricians, painters and decorators and you may employ other people to help run the business also.
Tax requirements for sole traders
When you run a business you must pay income tax on your net profits (your business income less business expenses). As a sole trader you will need to file an IR3 tax return with Inland Revenue at the end of the financial year. The return will indicate whether you need to pay tax and how much. It is important to file your tax returns correctly and using a company like WE Accounting can help ensure that you do.
WE offer competitive pricing plans for filing Sole Trader tax returns. Contact us for more information on 09 3789207