Sole Trader rant

Mistral001
Mistral001 Posts: 5,346
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edited 25 May 2018 at 2:40PM in Small biz MoneySaving
There have been a number of threads where sole trader has been mentioned when the poster perhaps seems to infer that "sole trader" means a one-man or a small business.

The term "sole trader" does not refer to the number of people involved in the business or even the size of the business. You can be a sole trader and have quite a large firm with several employees. I once worked in a sole trader business where there were 12 employees.

The "sole" of "sole trader" refers to the fact that there is one person who is personally responsible for all financial responsibilities for the business. That is all. As I say several sole traders operate quite large businesses employing several people.

rant over

Comments

  • Lomast
    Lomast Posts: 845
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    I know of one sole trader that employs over 300 people but this still seems like a slightly pointless thread
  • Pennywise
    Pennywise Posts: 13,468
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    By the same token, too many people think that a limited company conveys some kind of superiority/respectability which is completely misplaced seeing as literally anyone can set up a limited company for just £15!

    Even the passport office will accept someone as a counter-signatory simply by virtue of them being a company director.

    There's a lot of mis-information out there.
  • Kayalana99
    Kayalana99 Posts: 3,626
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    Pennywise wrote: »
    By the same token, too many people think that a limited company conveys some kind of superiority/respectability which is completely misplaced seeing as literally anyone can set up a limited company for just £15!

    Even the passport office will accept someone as a counter-signatory simply by virtue of them being a company director.

    There's a lot of mis-information out there.

    Yes it really suprized me when I had to find someone to sign the back of a photo and the list was everything from doctors...teachers...and photographer!

    I used to be a photographer, does that mean I could have signed it for someone else? Anyone can pick up a camera and the 'professional photographer' definition is anyone that charges for their services...very strange how they come up with this stuff.
    People don't know what they want until you show them.
  • Mistral001
    Mistral001 Posts: 5,346
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    edited 28 May 2018 at 9:14AM
    It is easy to see how the common misconception that sole trader businesses are very small businesses or even that they are just self-employed people who do not have any employees has come about in the UK.

    There is no requirement to "register" a sole trader business in the UK and hence there are no publicly available statistics on them as far as I can see. HMRC know who they are but they know because sole traders must give HMRC details of the business they run and any trading name the business might have. They ask for this information so that they can check for evasion of income tax. Information that HMRC hold on people is confidential.

    Thus it is not surprising that journalists and bloggers get it wrong. They only get statistics on Ltd companies and other entities like that. They often know nothing abou the sometimes quite large businesses run by sole traders. Their minds, bless them, equate "sole" of "sole trader" with one-person businesses and use the term incorrectly.
  • Pennywise
    Pennywise Posts: 13,468
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    Mistral001 wrote: »
    Thus it is not surprising that journalists and bloggers get it wrong. They only get statistics on Ltd companies and other entities like that. They often know nothing abou the sometimes quite large businesses run by sole traders. Their minds, bless them, equate "sole" of "sole trader" with one-person businesses and use the term incorrectly.

    To be fair to journalists, it seemed Gordon Brown didn't understand either. A fair few times, he stood up and announced various tax incentives "for business" only for the small print to show they only applied to limited companies and that sole traders/partnerships couldn't benefit from them. Then they wondered why so many "sole traders" suddenly started to turn themselves into limited companies!
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