Sole trader is an individual who carry on business with a view to making profit without incorporating a legal form. A limited company is a legal entity separate from a sole trader in its own right. Sole trader can not be an employee of his or her business while the owner of a limited company can be an employee of his or her limited company. Sole trader carry full responsibility of the business debt whereas shareholder of a limited company has a limited liability to the extent of the purchase of shares.
Real Time Information is a system set up by HMRC to collect weekly and monthly deductions made from employees’s earnings online. So it is employer’s responsibility to ensure that right tax and national insurance deductions have been made and submitted to HMRC on a weekly or monthly basis depending upon how often the payroll is run.
If you are on weekly payroll then you pay tax on weekly earnings above £204.00 and national insurance earnings above £155.00. If you are on monthly payroll then you pay tax on monthly earnings above £884.00 and national insurance earnings above £670.00.