In MTD IT, the taxpayer is always the Individual (the person). The Sole Trader business is treated as a source of income linked to that person.
So, when you set up a new sole trader client, you will usually see:
Individual = the person (e.g., “Adam”)
Sole Trader Business = the trading activity (e.g., “Adam Plumbing”)
This is intentional, because:
HMRC authorisation is tied to the individual taxpayer
the trading business is one (or more) income sources under that taxpayer
future expansion (e.g., adding property, multiple trades) becomes cleaner when the person is the “parent”
What you should do:
Create/confirm the Individual record
Link/attach the Sole Trader business to that individual
Continue into MTD IT and authorise with HMRC
Common confusion:
If you only create a business without linking the individual correctly, you may later find you cannot proceed smoothly with authorisation or business syncing.