cheap accountants - the boss

Operating as a Sole Trader is often referred to as the simplest business structure and this is probably true. A sole trader can start up business very easily and quickly without jumping through a lot of red tape. A sole trader can virtually start up and go.

 

We are often asked about salary payments and drawings made by a sole trader and how these are transacted. This blog post will help to explain this to all sole traders operating within the UK.

 

A sole trader is very different to a limited company and the first thing that all sole traders should remember is that the surplus of income over expenditure belongs to you and this is effectively your income. There is no option to leave retained earnings within the company, as you may with a limited company, as when you operate as a sole trader the company is you and there is no separate company identity.

 

So in simple terms sole trader profits = business owner income. There is no need to perform any further transactions as the income is yours.

 

If you need further advice on your company structure then email a cheap accountant for further details.