The main difference between being a sole trader and self-employed lies in the fact that sole trader refers to a type of business structure, while self-employed refers to an employment status. A sole trader runs an unincorporated business as an individual. They personally own all the assets and liabilities of the business, with no legal separation between the business and the owner. Sole traders file taxes through self-assessment and report all business income and expenses on their personal tax return. Self-employed, on the other hand, simply means working for yourself rather than an employer. You can be self-employed in a variety of business structures, not just as a sole trader. For example, you could be self-employed as a partner in a partnership or director of a limited company. Being self-employed indicates that you run your own business and don’t have an employer-employee relationship with someone else. In summary, sole trader refers specifically to an unincorporated business structure owned and operated by an individual. Self-employed is a broader term for anyone running their own business, and encompasses sole traders as well as other business structures. Sole traders are always considered self-employed, but self-employed people can have different formal business structures beyond just sole trader status.