Miscellaneous 

Can you employ staff if you are a sole trader?

Leia Doyle

Can you employ staff if you are a sole trader?

Sole traders are always self employed. Although they can employ other people, they cannot employ themselves. This means that a company can have a contract of employment with its own director(s). Sole traders cannot do this – the person is the business, so they cannot have an employment contract with themselves.

Can a sole trader be on payroll?

Sole traders can still employ people You’ll need to operate a PAYE (Pay As You Earn) payroll scheme for this purpose.

Can I be self employed and have employees?

Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees. Someone can be both employed and self-employed at the same time, for example if they work for an employer during the day and run their own business in the evenings.

Can a sole trader be a contractor?

Sole trader risk for contractors Contractors who trade as sole traders are lumping their business assets and personal assets together. The law and HMRC do not distinguish them in the same way that a limited company is a separate legal entity from the contractor director and shareholder behind it.

Can a sole trader be caught by IR35?

The simple answer is that IR35 does not affect sole traders. The IR35 legislation applies only to incorporated businesses and therefore a sole trader cannot be caught by IR35. On the contrary, a sole trader will not carry any liability for their own employment status.

Do sole traders need to be registered?

Sole traders don’t have to register with Companies House, but they do have to maintain accounting records, pay income tax and file a self-assessment return with HMRC every tax year. For all the ins and outs of being a sole trader, read on.

Why do sole traders fail?

The reasons for these sole traders closing their doors is varied, however IFS identified specific factors that trended more commonly across business closure than others, namely; the age of the owner, years in business, profits and turnover.