Sole Traders and Consultants

The vast majority of small businesses in the UK operate as sole-traders, where there is no legal distinction between the business and the owner.

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This is the simplest business structure, and may in many cases also be the most appropriate, particularly during the early years of trading when losses may be incurred due to the greater flexibility offered to a sole trader when utilising those losses.

It is important to remember that what may start as a hobby enterprise may become a taxable trade in the eyes of HMRC, and once this line is crossed there are various reporting requirements that must be met if fines and penalties are to be avoided. It is also important to remember that because there is no legal distinction between the business and the owner, sole traders have unlimited liability to their customers and other business associates.

"I was referred to Dufton Kellner over 20 years ago by my bank manager and it was the best thing that ever happened."

Dave Williams, Paramount Arboricultural Services

Although it is possible to transfer from one business structure to another as a business grows or even contracts, there are numerous tax and commercial considerations that make it very worthwhile to sit down with us and plan your business life cycle as soon as possible after you commence to trade; preferably beforehand. That way we can ensure that you trade through the right vehicle to protect and benefit you commercially whilst also enabling you to enjoy as many tax reliefs as possible.

Some individuals, particularly those providing consultancy or advisory services, may be required by their customers to operate through ‘one-man-band’ limited companies. This structure is always primarily designed to protect your end customer, who does not want the risks and costs associated with employment. If you do operate on your own providing consultancy services via a limited company, there are many tax traps, most notoriously IR35, which make it very important to take our advice at the earliest opportunity.


"I am an accountant's worst nightmare! Dufton Kellner have been infinitely kind and patient. They are brilliant and I would recommend them highly to anyone."

Susie Batsford, Director, Pupfish Limited

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