Drawings are not wages

A sole trader does not pay themself a wage. What you take out is drawings, and it does not change your profit.

EasyPremium8 min

This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.

Task 1Taking money out4 questions

A sole trader cannot employ themself. Money you take out of the business is drawings, not a wage.

Drawings are not a business expense. They do not reduce the profit.

You are taxed on the profit the business made, whether you took all of it out, some of it or none.

Task 2What is left in the business4 questions