Personal, Business, and Trust Tax Support

Differences between Business Tax Business and Sole Trade in Personal Tax

When you add select
Edit
,
Schedule Editor
,
Sole Trade
, then
New
 to add a new sole trade, you will need to choose whether to set it up as a Business Tax Business or a Sole Trade instance.
Your choice of Business Tax Business or Sole Trade Instance will depeond their different characteristics and how many Business Tax licences you have.

Characteristics of a Business Tax Business

  • Automatically calculates the basis periods, overlap, and capital allowances for self-employment based on the accounting periods and assets entered.
  • Uses a business tax licence.
  • Called Business:
    Sole Trade Name
     in the Information Explorer.
  • Called
    Sole Trade Name
     (Business) in the Schedule Editor.

Characteristics of a Sole Trade instance

  • Manually calculate basis periods, overlap, and capital allowances.
  • Does not use a licence.
  • Shows the sole trade name in the Information Explorer and Schedule Editor.

How to check your Business Tax licences

Go to
Help
,
About Digita Personal Business and Trust Tax
, then
Licence
.

When you have many or unlimited Business Tax licences

If you have unlimited or large number of business tax licences, you may prefer to use a Business Tax Business for all of your sole trade clients.

When you have limited Business Tax licences

You could use a Sole Trade Instance and preserve your Business Tax licences if your client:
  • has only basic self-employment affairs, for example if they are semi-retired or have very basic accounts
  • has one year accounts each year and has not plans to change the accounting date
  • has simple capital allowances, such as a van and a couple of items in a main pool.
You may prefer to use a Business Tax Business because it will take care of capital allowance calculations and overlap/basis period adjustments, which is useful if your client:
  • has complex self-employment affairs
  • commences in the year and needs basic period adjustments
  • is likely to change accounting dates to create or utilise overlap relief
  • has multiple capital allowance entries.

This article applies to:

  • Product: Digita Personal Business and Trust Tax