Overview of sole trader tax planning

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

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:

Event	Typical planning considerations
Accounting period end	Capital purchases Expenditure deductible when paid
Pension input period (PIP) end	Pension contributions (annual allowance planning)
Tax year end	Pension contributions (higher rate relief planning) Charitable donations Personal taxation considerations
Completion of accounts	Provisions Bonus accruals
Completion of tax return	Payment of accrued bonuses Claims and elections for relief
Payments on account	Reduction in payments on account

Some

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Research and development expenditure credit (RDEC)

Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for

14 Jul 2020 13:24 | Produced by Tolley in association with Will Sweeney Read more

Owner-Managed Businesses

Sales, advertising and marketing

Sales, advertising and marketingExpenditure on sales, advertising and marketing activities may include amounts which are disallowable for the purposes of calculating trading profits. This may be because the expenditure is:•capital in nature (see the Capital vs revenue expenditure guidance note)•not

14 Jul 2020 13:28 | Produced by Tolley Read more

Owner-Managed Businesses

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more

��Ӱ��