Summary of Obligations for Sole Traders

  • Sole Traders, also called Sole Proprietors are required to file an Income Tax Return for individuals (Non-Emolument) each year.

  • If income is above $250,000 after three years of commencement of trading (from the date of registration), sole traders are liable to pay Business Levy at the rate of 0.6% on gross revenue or receipts.

  • Where applicable, Sole Traders are liable to pay PAYE at the rate of 25% on the profits after deducting business expenses and personal allowances. Please note that chargeable profits over $1,000,000 are taxed at the rate of 30%.

  • A Sole Trader is liable for paying Health Surcharge at the rate of $8.25 per week (or $429 per annum) if below the age of 60 years.

  • Like all other business structures, a Sole Trader is responsible for keeping proper record keeping and filing taxes each year.

 

Payment dates:

  • PAYE, NIS & Health Surcharge – 15th every month
  • Income Tax – 30th April (with the filing of the tax return)
  • Business Levy – last day of each quarter (Mar, June, Sep, Dec)
  • VAT – 25th day of the month following the VAT period. 

Filing Date:

Filing your Income Tax return is done usually on April 30th (or the date specified by the Board of Inland Revenue).

If you registered and operated a business for any part of 2020, then filing is mandatory. (even if no transactions occurred and no money made)

 

Penalties and interest:

For not filing tax returns – sole traders incur $100 every 6 months after the first 6 months. (from November 1st and every six months thereafter)

Late payment of VAT results in a Penalty of 8% and interest of 2% per month.