³ÉÈËÓ°Òô

Overview of sole trader tax planning

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Overview of sole trader tax planning

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

Because sole traders are the most simple trading entity possible, it is very easy to overlook them when it comes to planning work. It is often the case that planning for such clients will be done on a purely reactive basis, such as when they approach an adviser to discuss incorporation or purchasing large capital items.

However, advisers should endeavour to review all of their clients’ positions at least once a year.

Planning events

Determining when to conduct planning for sole traders can be challenging. There are several annual events which may dictate when best to undertake planning work and what sort it is:

EventTypical planning considerations
Accounting period endCapital purchases
Expenditure deductible when paid
Pension input period (PIP) endPension contributions (annual allowance planning)
Tax year endPension contributions (higher rate relief planning)
Charitable donations
Personal taxation considerations
Completion of accountsProvisions
Bonus accruals
Completion of tax returnPayment of accrued bonuses
Claims and elections for relief
Payments on accountReduction in payments on account

Some

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

Powered by
  • 09 Feb 2023 08:33

Popular Articles

Carried-forward losses restriction

Carried-forward losses restrictionOverview of the carried-forward loss restrictionAn important restriction in the use of losses carried forward was introduced by Finance (No 2) Act 2017. Subject to a de minimis of £5m (known as the deductions allowance), most carried-forward losses are restricted to

14 Jul 2020 11:09 | Produced by Tolley Read more Read more

Winding up a trust ― legal, administrative and compliance issues

Winding up a trust ― legal, administrative and compliance issuesOverviewWhen winding up a trust, there are legal formalities and compliance issues that need to be dealt with, as well as IHT and CGT consequences that flow from the termination. This guidance note considers when and how a trust comes

14 Jul 2020 14:01 | Produced by Tolley Read more Read more

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more