sole trader/self-employed/small business?

[Deleted User]

Sorry if this is not the right thread, but there did not seem to be anything obvious on the forum. After spending over an hour waiting to speak to someone from HMRC, I ended up more confused than before. I'm trying to find out the difference between Sole Trader/Self-employed and Small Business. The HMRC lady got very confused and in the end just said to look at the HMRC website (which of course I have done, along with other sites such as Which). She did put me through to another advisor who then told me to write in to HMRC. I am someone who provides a service of training to teachers, then I invoice for the event (usually a day) and they pay me a month later. I do most of my work at home (needing a laptop/Zoom/office chair etc) but also drive out to Hubs whereby I do the same but face to face. My car is used very little for social events, as my husband drives, therefore it is at least 80% used for work. Having read websites, it seems that I may be able to claim for petrol, but also my laptop/chair/utilities/council tax etc, but it all depends. I did explain to HMRC person  that I did not want to register wrongly, and then be chased for any monies owing. I don't bring in much revenue, possibly enough to just go over my tax threshold, so I'm not going to be a person of major interest to them. In short (and I appreciate that a short answer might not be appropriate), I just really need to understand the difference between the three definitions, and what I can add to my tax return and what I cannot. Is anyone able to give me a short (ish) explanation of the three? Many thanks in anticipation.

Bobbobbobingalong

In the context you are talking about, they are all one and the same https://www.gov.uk/set-up-sole-trader.

[Deleted User]

No not true according to HMRC. This is the issue!

saker75

As a sole trader, which you seem to be, you can offset costs of all business related expenditure - even proportions of council tax and bills based on the space you use. I used a system called gosimpletax.com which auto-suggested items that could be claimed. I was mostly IR35 in the end so got a rebate. 

Bobbobbobingalong

[Deleted User] said:

No not true according to HMRC. This is the issue!

Well ask your bank then, they will say the same. I'd respectfully suggest that (as you already seem to believe anyway) the person you spoke to at HMRC has not got a Scooby!

General_Grant

You are running a small business.  As you appear not to have set up a separate legal entity (eg a limited company), you are self-employed.  As it is just you running the business, you are a sole trader (and would still be a sole trader if you took on staff to assist you).

[Deleted User]

As a sole trader, which you seem to be, you can offset costs of all business related expenditure - even proportions of council tax and bills based on the space you use. I used a system called gosimpletax.com which auto-suggested items that could be claimed. I was mostly IR35 in the end so got a rebate.'

Thank you Saker75. That is what I thought. The women in Self-assessment team HMRC basically told me to work it out myself, In fact, one said that a sole-trader was someone who took payment by cash only, for a job like painting!! She said to claim council tax etc, I had to register as a Business Trader, with the business in my name only (humm....is that sole-trader??? ) I was amazed by such incompetence. 

Marcon

[Deleted User] said:

As a sole trader, which you seem to be, you can offset costs of all business related expenditure - even proportions of council tax and bills based on the space you use. I used a system called gosimpletax.com which auto-suggested items that could be claimed. I was mostly IR35 in the end so got a rebate.'

Thank you Saker75. That is what I thought. The women in Self-assessment team HMRC basically told me to work it out myself, In fact, one said that a sole-trader was someone who took payment by cash only, for a job like painting!! She said to claim council tax etc, I had to register as a Business Trader, with the business in my name only (humm....is that sole-trader??? ) I was amazed by such incompetence. 

In all fairness to HMRC, their helpline isn't there to take the place of your engaging the services of an accountant, so the response may not have been quite as unreasonable or 'incompetent' as you seem to believe. There's often a mismatch between the question asked by an irritated (after hanging on for ages to get through!) and confused caller and the answer given by a harassed recipient of the call. Maybe you were just being given an example of a sole trader, in an attempt to help you understand what they thought you were asking?

It might be worth getting some initial advice from an accountant to ensure you are claiming all the allowances to which you are entitled/have everything set up and running smoothly.

It sounds as if you are at the start of this venture, so https://therebelschool.com might have some free courses of interest.

ChasingtheWelshdream

Hi OP,

I am in the process of starting up my small business, which will be run from
home as a sole trader. There is a business support association in my area sponsored by Welsh Government, and they provide free 1-2-1 business guidance to new and existing businesses. They have been invaluable with their advice and resources, and as well as individual sessions they also put on workshops on all sorts of business areas, including financial. I have been given some very good resources about allowable expenses.

Is there something similar in your area that you could run your questions by? There was a similar service in my old area too so I imagine there might be where you are.

Dazed_and_C0nfused

[Deleted User] said:

No not true according to HMRC. This is the issue!

The problem is you have asked a question no one will ever have asked before.

They are all the same thing but you have confused HMRC by asking an unusual question.

Or anyone you just got a trainee!

tightauldgit

[Deleted User] said:

As a sole trader, which you seem to be, you can offset costs of all business related expenditure - even proportions of council tax and bills based on the space you use. I used a system called gosimpletax.com which auto-suggested items that could be claimed. I was mostly IR35 in the end so got a rebate.'

Thank you Saker75. That is what I thought. The women in Self-assessment team HMRC basically told me to work it out myself, In fact, one said that a sole-trader was someone who took payment by cash only, for a job like painting!! She said to claim council tax etc, I had to register as a Business Trader, with the business in my name only (humm....is that sole-trader??? ) I was amazed by such incompetence. 

HMRC are not there to provide you tax advice though. Which is lucky because if that's what you were told it was nonsense (other than to work it out yourself). 

A sole trader is a small business is self employed.  

If you want to know what you can claim for use of home as an office, or for use of your car then google really is your friend. If you're still unsure then the best way forward is to hire an accountant who will know exactly what you can and cant claim.