ýIf you are operating as a sole trader, the benefits are that it is a simple form of ýýbusiness to establish and there are no formal legal restrictions. You can enjoy all the ýýprofits and there is no legal requirement to keep accounts other than to inform the tax ýýinspector of the tax liability of the business (which will in fact be your personal ýýincome tax liability). The Inland Revenue will require acceptable accounts and ýýtaxation computation, however, and this will usually mean that you have to pay an ýýaccountant to draw up the final accounts and audit the books in order to avoid paying ýýtoo much taxation and to satisfy the tax inspector at the Inland Revenue. As a sole ýýtrader there is nothing to stop you carrying out this work yourself if you have the ýýrequired skills.ý
ýBeing a sole trader also brings problems ? mainly your difficulty in finding the ýýnecessary capital to start the business and the requirement on you if you do borrow ýýfrom the bank, to put up some form of collateral such as your house and other ýýpersonal possessions. Furthermore, you have unlimited liability, which means that if ýýthe business goes into receivership you will not only lose all of the money you have ýýinvested in the business but could, if the business owes more than its asset value, ýýlose your own personal assets. A sole trader could be made personally bankrupt due ýýto the failure of the business. You will probably have to work very long, and in many ýýcases unsocial hours. If you become ill or want to go on holiday you will have to pay ýýsomeone to look after the business. Can you put trust in such hired help? Running ýýyour own business can be very stressful.ý
ýAdvantages and disadvantages of sole tradersý
ýAdvantagesý