Setting up as a sole trader

I have worked in tax for more than 20 years but have denied it when socialising for about 15 of those because it is the ultimate conversation stopper. However as I have grown older more friends are wanting to start their own business and suddenly they are keen to know someone with some tax knowledge. It is daunting for them to leave the safety of employment income and PAYE where the employer calculates the tax and National Insurance and pays the amounts to HMRC. They are venturing into a new realm of responsibility and self assessment tax returns.

Starting a business is a good tax topic. It is a cross-pollination of taxes and for this reason it is also a popular question for the Association of Taxation Technicians examiners.

The ATT paper 2 considers the profits assessable to tax for different types...