Sole Trader: Hiring Your First Employee

By Sophie Redman
16 July 2024

Growing Your Sole Trader Business: Hiring Your First Employee

At Linford Grey, we understand the journey of a sole trader as we work with quite a few. You’ve poured your heart and soul into building your business, and now it’s thriving!

But you might be reaching a point where you need some extra hands to keep that momentum going.

The good news? You don’t necessarily have to switch your business structure to take on employees. That’s right, as a sole trader, you can hire staff and build your dream team.

Building Your Team as a Sole Trader

There are a few key things to remember when taking on your first employee as a sole trader:

You can hire anyone: Whether it’s full-time, part-time, or contractual, you have the flexibility to bring on staff that meets your specific needs.
Be an official employer: You’ll need to register as an employer with HMRC and set up a PAYE scheme. This ensures you’re correctly deducting and paying taxes for your employees.
You’re the boss (but not an employee): As the sole trader, you are the business. You can’t pay yourself through PAYE like a traditional employee. Your income comes from the profits of the business after expenses.

Benefits of Hiring as a Sole Trader

There are many advantages to taking on employees as a sole trader:

Increased productivity: Free yourself up to focus on strategic tasks while your employees handle day-to-day operations.
Specialised skills: Bring in expertise you might lack to expand your service offerings.
Growth potential: A well-staffed business is poised for growth and can take on more clients or projects.

Getting Started: Resources from Linford Grey Associates

We want to see your sole trader business flourish here at Linford Grey. Here are some resources to help you navigate the process of hiring your first employee:

HMRC employer registration: https://www.gov.uk/register-employer
Understanding PAYE: https://www.gov.uk/paye-for-employers

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