REGISTRATION FOR SELF-EMPLOYMENT/SOLD TRADER
A sole trader is a simplest form of business structure involves a person trading as the individual legally responsible for all aspects of the business. This includes any debts and losses, which can’t be shared with others. This is the relatively inexpensive business structure that you can choose when starting a business. As a sole trader, you’ll generally make all the decisions about starting and running your business, although you can employ people to help you.
- There isn’t much paperwork to do, there are no registration fees to pay, but you must register with HM Revenue & Customs for tax and National Insurance purposes.
- By registering with HMRC must follow certain rules on running and naming their business.
- If you’re a sole trader, you run your business individually and you are self employed.
- You can hire staff – being a sole owner or self employed does not mean that you are not eligible to hire workforce.
- If you haven’t registered by 5 October in your business’s second tax year, you could be hit with heavy fines.
- You’re responsible for:
- Record keeping of your business’s sales and expenses
- Sending a Self Assessment tax return every year
- Paying Income Tax on your profits and Class 2 and Class 4 National Insurance – use HMRC’s calculator to help you budget for this
- Your business debts
- Bills for anything you buy for your business
- Registering for VAT if your turnover reaches the VAT threshold
- Registering with the Construction Industry Scheme if you’re a contractor or sub-contractor in the construction industry
How to name your business
- You can use your own name or trade under a business name.
- You must include your own name and business name (if you have one) on any official paperwork, like invoices and letters.
- If use a business name you must follow these rules
- You can’t include the terms ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’ in the name
- Your business name can’t be offensive or use a ‘sensitive’ word or expression
- It can’t be the same name as that of an existing business.
- Your name can’t suggest a connection with government or local authorities unless you have permission to do so