Annual accounts for sole traders
As a sole trader, you should normally close your current accounts with simplified or ordinary annual accounts.
Simplified annual accounts
If you have a turnover of SEK 3 million or less, you may prepare simplified annual accounts in accordance with what is known as the K1 regulations. If your turnover is higher, you must prepare ordinary annual accounts.
The following must be included in simplified annual accounts:
- A balance sheet showing the financial position of the company with assets, liabilities and equity at the end of the financial year.
- A profit and loss statement showing the income, expenditure and profit/loss for the past financial year.
The regulations on simplified annual accounts can be found in the Swedish Accounting Standards Board's guide on K1 for sole traders. The guide also contains instructions on what should be recorded in the company's accounts. The K1 regulations are described and explained in a simply way in the Swedish Tax Agency's brochure “Bokföring, bokslut och deklaration del 1” [Bookkeeping, annual accounts and tax return part 1].
You can prepare your simplified annual accounts using the Swedish Tax Agency's e-service for simplified annual accounts. You can then easily download the information from the e-service to your tax return. You can also prepare your annual accounts in an accounting program or on paper.
- “Bokföring, bokslut och deklaration del 1”, SKV 282, on the Swedish Tax Agency's website (in Swedish)
- K1 guide for sole traders on the Swedish Accounting Standards Board's website (in Swedish)
- Video: Simplified annual accounts at the Swedish Tax Agency (in Swedish)
- Use the Swedish Tax Agency's e-service to prepare your simplified annual accounts (in Swedish)
- Download form SKV 2150 for simplified annual accounts from the Swedish Tax Agency's website (in Swedish)
If you do not prepare simplified annual accounts
If your turnover is more than SEK three million per year, you must prepare ordinary annual accounts following the Swedish Accounting Standards Board's K regulations for annual accounts. You can also choose to prepare ordinary annual accounts if the turnover of your business is less than SEK 3 million.
Ordinary annual accounts must include:
- A balance sheet showing the financial position of the company with assets, liabilities and equity at the end of the financial year.
- A profit and loss statement showing the income, expenditure and profit/loss for the past financial year.
- Supplementary information to the balance sheet and profit and loss statement.
Annual accounts guide on the Swedish Accounting Standards Board's website (in Swedish)
Annual report
In rare cases, you must prepare an annual report as a sole trader. This applies if your company is considered a large enterprise. However, very few sole traders are that large. The annual report must be drawn up in accordance with the Swedish Accounting Standards Board's K3 regulations.
Read about what is considered a large enterprise on the “Limited company” page
There is normally no requirement for an auditor
A sole trader is not normally required to have an auditor. An audit is only required if your business is considered large and you are required to prepare an annual report.
More information for you at the Swedish Accounting Standards Board
The Swedish Accounting Standards Board has compiled information on accounting obligation, bookkeeping, annual accounts and annual reports for sole traders.
Sole traders on the Swedish Accounting Standards Board's website (in Swedish)