Sole Trader FAQ
HOW MUCH SHOULD I RETAIN FOR TAX AND NATIONAL INSURANCE?
When you register with Stonebridge we will provide you with sample calculations showing how much you need to retain for your tax and National Insurance. It is very important that you retain a sufficient amount each week so that you are able to pay your liabilities. Failure to do so will result in fines.
HOW DO I CLAIM MY EXPENSES?
As a self-employed subcontractor you are eligible to claim your business expenses. The claim will be made at the end of the tax year by completing a Self-Assessment. Please ensure you keep a record of all the expenses you incur as well as accompanying receipts.
WHAT EXPENSES CAN I CLAIM FOR?
All expenses you claim must have been incurred ‘wholly and exclusively’ for the performance of your trade. Expenses incurred that are only partially for business will be allowable to the extent they were used for business purposes. Typical expenses include, but are not limited to, travel costs, tools and equipment, work specific clothing and footwear, training costs, insurances, accountancy fees, advertising and laundry.
WHAT INFORMATION DO I NEED FOR A SELF-ASSESSMENT?
You will need to have a record of all of your business’ sales and expenditure such as invoices and receipts. You will also need to declare any other income you may have such as dividend income or property income. If you make payments into a pension scheme or receive any benefits from any employment throughout the year, these will also have to be disclosed.
CAN STONEBRIDGE COMPLETE MY SELF-ASSESSMENT?
Yes. Once we have got all of your information, we will put your claim together within 21 working days. Once we have sent this to HMRC, your rebate (if due) will typically be paid out within 6-8 weeks. If you would like us to complete your self-assessment at the end of the year please email email@example.com Our standard fee to complete a Self-assessment is £250 plus VAT, which may increase with additional sources of income.
HOW DO I REGISTER AS SELF-EMPLOYED?
To set up as a sole trader, you will need to register for Self-Assessment. You can do this by visiting the following link: https://www.gov.uk/register-for-self-assessment/self-employed
If you have an accountant or an agent who will be acting on your behalf, you will need to ensure you ‘authorise’ them by completing a 64-8 form. This is a formal agreement which allows them to discuss your tax affairs with HMRC.
WHAT NATIONAL INSURANCE DO I NEED TO PAY?
You will pay class 2 National Insurance which is £3.15 a week, if you earn more than £6,725 a year. You will also pay 10.25% on profits between £9,881 and £50,270 and 3.25% on profits over this amount.
WHAT INSURANCES SHOULD I HAVE?
As a self-employed subcontractor you are required to hold public liability cover. If you do not have your own cover, Stonebridge will provide this to you for £2.50 per week that you work. You also have the option of taking out our personal accident insurance for £2.50 a week, which can provide invaluable financial assistance in the event that you are unable to work due to an accident.
HOW DO I KNOW I HAVE BEEN PAID?
We will send you a text message once we have processed your pay and this will indicate your payment date. You will also receive a self-bill invoice via email, which will detail your gross earnings and a breakdown of your deductions. This will also be uploaded to your online portal for you to view at your convenience.
HOW CAN I GET A COPY OF MY STATEMENT OF EARNINGS?
Please email us at firstname.lastname@example.org to receive a copy of your statement of earnings. This will detail all invoiced amounts and deductions from your time contracted to Stonebridge, which will enable you to complete your Self-Assessment tax return.
AM I ENTITLED TO HOLIDAY PAY?
Only workers and employees are entitled to holiday pay. As a self-employed subcontractor, you are not entitled to holiday pay. You are expected to manage your own finances and have a provision for when you do take time off work, or if there are times that you do not have work available.
DO STONEBRIDGE WITHOLD RETENTION FROM MY PAYMENTS?
No, Stonebridge do not withhold retention from your payments.
DO I NEED TO REGISTER FOR VAT?
You can voluntarily register for VAT if you are making taxable supplies (consider whether your customers will be able to reclaim VAT), but you must register for VAT and charge it when your turnover reaches £85,000 in a 12-month period or you expect to go over the threshold in a single 30-day period. If you exceed the threshold in a 12-month period, you must register within 30 days. If you don’t, you will still have to pay what you owe from when you should have registered. You can register online by visiting the following link: