Tax Basics

Sole trader or limited company? Which of these statements refer to sole traders?

• Have to register the business with Companies House

• HMRC treats the owner and the business as one entity, therefore you/your possessions are at risk if the business falls into debt

• HMRC treats the owner and the business as two separate entities – there is a legal distinction between you and your business

• Greater privacy, as your accounts are not in the public domain

• Quicker and cheaper to set up and you only have to file your annual self-assessment

Which organisation do we pay our taxes to?

• DWP

• Inland Revenue

• HMRC

When does the tax year start and end?

• 6th April – 5th April

• 1st January – 31st December

• 1st April – 31st March

By which date do you have to submit your online tax return?

• 31st January

• 31st March

• 31st December

For tax purposes, how long do you have to keep records (invoices, receipts etc)?

• 10 years

• 7 years

• 6 years

How much can I earn from my business before I have to declare it to HMRC?

• £100

• £500

• £1000

My business will be eligible to pay VAT when my turnover reaches…

• £50,000

• £85,000

• £100,000

Any money I make from my business must be kept in a business bank account

• True

• False

I will need special (separate) insurance as a self-employed person

• True

• False

When I start my business, as a sole trader, I will have to submit my tax return through an accountant

• True

• False