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 of planning is appropriate:

EventTypical planning considerations
Accounting period end if accrual accountingCapital purchases
Expenditure deductible when paid
Tax year endPension contributions (annual allowance planning and 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

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 07 Nov 2025 07:20

Popular Articles

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more Read more

Taxation of loan relationships

Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Gifts with reservation ― overview

Gifts with reservation ― overviewIntroductionA gift with reservation (GWR) arises when an individual ostensibly makes a gift of his property to another person but retains for himself some or all of the benefit of owning the property. The legislation defines a gift with reservation with reference to

14 Jul 2020 11:48 | Produced by Tolley Read more Read more