A sole trader is someone who is self-employed and runs their own business in their own name (or business name). Unlike a limited company structure, sole traders do not have the luxury of limited liability in case something goes wrong, which means you are solely responsible for the business and its debts. If there are any business losses, these must be paid out of your own pocket. However, the advantage of being a sole trader is that after you’ve paid the tax you can keep all business profits.
These businesses should be registered with HMRC as soon as possible, and no later than 5 October after the end of the tax year of commencement.