1) What’s the difference between self-employment and sole trading?


There isn’t a difference – rather a sole trader is seen as a category of self-employment.

The other categories of self-employment are as a:

  • Partner in a Partnership, or
  • Proprietary Director in a Limited Company (controlling/owning more than 25% of the Company)


2) What’s a sole trader then?


A sole trader is a person who decides to conduct business on their own behalf. They do this by buying goods and selling them on or just selling on their own personal services.

Usually a Sole Trader is a one-man band and is what we call “self-employed” – you are your own boss and can decide when and how you work (you are not answerable to an employer, only to clients). It can be a lot of hard work and often you will not get a regular income.


3) How easy is it to start sole trading?


It is really easy to start a Sole Trade (compared to starting a Partnership or Limited Company). It is also easy to shut it down.

Here are some things you must do when you start though:

  • Register for taxes with Revenue on ROS.ie – you need to file your own taxes every year as a Sole Trader
  • Register your business name if you are not trading under your own legal name – this can be done on core.cro.ie by filing Form RBN1
  • Set up a business bank account – it’s best to keep the cash of the business separate from your personal cash and spending. You will need a Certificate of Business Name to open a business bank account

4) Do I need to register for VAT?


Yes one very important thing to remember is to register for VAT if required. The VAT registration limits are as follows:

  • Services – €37,500 in sales within a 12-month rolling period
  • Goods – €75,000 in sales within a 12-month rolling period

You then need to file VAT returns (normally every 2 months) and pay any VAT owed over to Revenue – so it’s best to keep an eye on cash flow and ensure you have this cash to pay.

5) Final Note


One final note – as a Sole Trader you are entitled to 100% of the profits of the business (after tax) but you are also liable for all the losses. If you make large losses in your business, your person assets could be repossessed from you to cover your debt.

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Mark Sweetman, ACA

Mark Sweetman, ACA

As a Chartered Accountant I've built my experience working within the SaaS and digital technology industries, growing early-stage businesses from the inside. I help digital entrepreneurs understand their companies and ensure they have all the tools they require to succeed and thrive. I love adopting new tech solutions and making use of these to increase efficiency within our clients' businesses.