Starting as a sole trader after the tax year has begun?

faringdon

[EDIT…My apologies, i just googled this question and it answers everything…..i just didnt realise how good google is now…….so please ignore this post…(unless you can think of some snaggy situations upcoming from it)…my apologies…….ENDofEDIT]

I have just been going for an electronics engineering job via an recruitment agency.
But now the actual company I would be working for have fallen out with that recruitment
consultancy and so the company now wants me to employ me directly on a 2 month "sole trader" contract.
Though I have not registered as a sole trader for this tax year.
Also, I have not completed the required sole trader "quarterly reports" to HMRC so far this year.
(admittedly that would just have been to say "zero pounds earned so far"...but anyway, I haven't done that,
and the new rules require me to have done that.)
So can I accept this sole trader contract or must I decline it?

LITRG

Hi faringdon, we have guidance pages on 'employment status' which you will find informative:

Employment status | Low Incomes Tax Reform Group

Employed, self-employed or neither | Low Incomes Tax Reform Group

The pages explain that, for tax purposes, an individual is classed as either 'employed' or 'self-employed'. The status depends on the specific facts and circumstances of the situation - it is not a matter of choice, but it is important that it is identified correctly as determines how tax is paid on the income as well as the individual's entitlement to certain statutory rights.

soolin

https://forums.moneysavingexpert.com/discussion/6684828/starting-as-a-sole-trader-after-the-tax-year-has-begun

Does this mean you've sorted out your various issues with references?

As for your question - you can register as a sole trader whenever you start up- there is no requirement to start at the exact start of the tax year, I can't imagine many people co incidentally start then.

You will need to submit accounts for this current tax year after 5th April 2027, so just start keeping proper records as soon as you start up, and remember to keep back some of the payments to pay your tax and NI .

faringdon

Thanks, refs not yet sorted out…thats for another application thats still dragging on.

The good thing about "Sole trader" is that as soon as you pass £12k7 in sole trader earnings you can claim the £1000 expenses benefit (if you claim it , it does mean you cant claim any other expenses though).

Its a good thing because even if you earn less than 12700£ as a sole trader, if your additional PAYE earnings for the year take you over £12700…then you can still claim it…..

So if you only earn £1k in the tax year as a sole trader, but earn >£11700 in PAYE earnings in that tax year aswell, then you can still claim the £1k sole trader allowance.

Having said that, in every year of my life i have accomodation claims which i never put through and so have vastly underclaimed on these kind of benefits every single year…specially in electronics where a new job almost always means total home re-location…..which is always expensive….even if you are only moving from/to a cheap_as_poss bedsit/flat.

JibberdyDacodo

https://forums.moneysavingexpert.com/discussion/6684828/starting-as-a-sole-trader-after-the-tax-year-has-begun

You CANNOT be 'employed' as a sole trader!

You are one or the other - you cannot be both simultaneously.

soolin

https://forums.moneysavingexpert.com/discussion/comment/82151691#Comment_82151691

No the £1000 trading allowance is taken from your sole trading income only- if you haven't had gross income of £1000 in any tax year then you don't need to declare anyway. If you do declare a gross income of less than £1000 you can claim trading allowance UP TO the amount you declare. Trading allowance cannot be used against other income received in same year.

You might be better off talking to an accountant at least for the first year.

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/comment/82152269#Comment_82152269

I suggest you read OP's various other threads where an accountant has been suggested several times but OP persists in doing things the hard way.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/82151691#Comment_82151691

If you akready registered as self employed for 2025/26 you do not need to register again. Your registration will continue until HMRC agree it can be closed.

soolin

https://forums.moneysavingexpert.com/discussion/comment/82152302#Comment_82152302

I can be persistent and I think with this user an accountant may well be an expense that is worth every penny. Trying to guess what the rules are could well cost a great deal more than an accountant.

EnPointe

https://forums.moneysavingexpert.com/discussion/comment/82152026#Comment_82152026

you can be both simultaneously .. i.e. both someone;s employee and a Sole trader but that is sperate jobs at seperate times etc etc etrc